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Slack’s hidden origins, cybersecurity, fintech, plus Africa’s startup growth

Posted by on Jun 1, 2019 in Anthemis Group, Bugcrowd, slack, The Extra Crunch Daily | 0 comments

The Slack Origin Story

Slack is one of the most iconic enterprise companies to come out of Silicon Valley. Part of the reason is the mythos surrounding the startup’s founding as a games company and later pivot into workplace communication. But what’s the story behind the story of the high-flying company? Who supported the company every step of the way?

Our venture capital reporter Kate Clark has the history and background on Slack, soon to be trading as WORK on the NYSE.

“We realized, wow, this is hugely a productive way of working and I think all of us agreed we wouldn’t work without a system like this again and maybe other people would like it,” Butterfield said in a recent video released by Slack ahead of its June 20 direct listing on the New York Stock Exchange.

So the team reimagined their future and looked to their investors for support.

Accel, sources tell TechCrunch, remained committed. Andreessen Horowitz, however, had a more complicated response. According to sources familiar with the matter, a16z was highly skeptical of Butterfield and whether he could succeed in the enterprise space. When Tiny Speck went out to raise its first round of capital as an enterprise software upstart in what would technically be its Series C, a16z hesitated.

A source close to Slack told TechCrunch that a16z put the company “through the ringer,” telling Butterfield that enterprise “wasn’t in his DNA.” A16z denies these accounts citing their close relationship with Butterfield and the business in 2019. Admittedly, it’s unclear how much capital a16z may or may not have funneled to Slack at the Series C but given it currently owns nearly 10 percent less of Slack than Accel, a fellow early investor, its likely to have cut back its capital commitments around the time of Tiny Speck’s pivot.

Feedback on product and editorial?

It’s been about 15 weeks since we launched Extra Crunch. Since then, we have covered everything from deep dives into Patreon and Niantic (Unity is coming right up – I’ve been editing the drafts) to growth tactics and how to raise venture capital really, really fast, to building out a Verified Experts list of top startup professionals.


Source: The Tech Crunch

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Slack narrows losses, displays healthy revenue growth

Posted by on May 31, 2019 in Accel, Airbnb, Andreessen Horowitz, Earnings, economy, Finance, initial public offering, Kleiner Perkins, operating systems, slack, Softbank, SoftBank Group, Spotify, t.rowe price, TC, U.S. Securities and Exchange Commission | 0 comments

Workplace messaging powerhouse Slack filed an amended S-1 with the U.S. Securities and Exchange Commission on Friday weeks ahead of a direct listing expected June 20.

In the document, Slack included an updated look at its path to profitability, posting first-quarter revenues of $134.8 million on losses of $31.8 million. Slack’s Q1 revenues represent a 67% increase from the same period last year when the company lost $24.8 million on $80.9 million in revenue.

For the fiscal year ending January 31, 2019, the company reported losses of $138.9 million on revenue of $400.6 million. That’s compared to a loss of $140.1 million on revenue of $220.5 million the year prior.

Slack is in the process of completing the final steps necessary for its direct listing on The New York Stock Exchange, where it will trade under the ticker symbol “WORK.” A direct listing is an alternative approach to the stock market that allows well-known businesses to sell directly to the market existing shares held by insiders, employees and investors, instead of issuing new shares. The method lets companies bypass the traditional roadshow process and avoid a good chunk of Wall Street’s IPO fees.

Spotify completed a direct listing in 2018; Airbnb, another highly valued venture capital-backed business, is rumored to be considering a direct listing in 2020.

Slack is currently valued at $7 billion after raising $1.22 billion in VC funding from investors, including Accel, which owns a 24% pre-IPO stake, Andreessen Horowitz (13.3%), Social Capital (10.2%), SoftBank, T. Rowe Price, IVP, Kleiner Perkins and many others.


Source: The Tech Crunch

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Someone could scoop up Slack before it IPOs

Posted by on Feb 7, 2019 in Cloud, communications tools, Enterprise, Fundings & Exits, Microsoft, slack, Social, Yammer | 0 comments

Earlier this week, Slack announced that it has filed the paperwork to go public at some point later this year. The big question is, will the company exit into the public markets as expected, or will one of the technology giants swoop in at the last minute with buckets of cash and take them off the market?

Slack, which raised more than $1 billion on an other-worldly $7 billion valuation, is an interesting property. It has managed to grow and be successful while competing with some of the world’s largest tech companies — Microsoft, Cisco, Facebook, Google and Salesforce. Not coincidentally, these deep-pocketed companies could be the ones that come knock, knock, knocking at Slack’s door.

Slack has managed to hold its own against these giants by doing something in this space that hadn’t been done effectively before. It made it easy to plug in other services, effectively making Slack a work hub where you could spend your day because your work could get pushed to you there from other enterprise apps.

As I’ve discussed before, this centralized hub has been a dream of communications tools for most of the 21st century. It began with enterprise IM tools in the early 2000s, and progressed to Enterprise 2.0 tools in the 2007 time frame. That period culminated in 2012 when Microsoft bought Yammer for $1.2 billion, the only billion-dollar exit for that generation of tools.

I remember hearing complaints about Enterprise 2.0 tools. While they had utility, in many ways they were just one more thing employees had to check for information beyond email. The talk was these tools would replace email, but a decade later email’s still standing and that generation of tools has been absorbed.

In 2013, Slack came along, perhaps sensing that Enterprise 2.0 never really got mobile and the cloud, and it recreated the notion in a more modern guise. By taking all of that a step further and making the tool a kind of workplace hub, it has been tremendously successful, growing to 8 million daily users in roughly 4 years, around 3 million of which were the paying variety, at last count.

Slack’s growth numbers as of May 2018

All of this leads us back to the exit question. While the company has obviously filed for IPO paperwork, it might not be the way it ultimately exits. Just the other day CNBC’s Jay Yarrow posited this questions on Twitter:

Not sure where he pulled that number from, but if you figure 3x valuation, that could be the value for a company of this ilk. There would be symmetry in Microsoft buying Slack six years after it plucked Yammer off the market, and it would remove a major competitive piece from the board, while allowing Microsoft access to Slack’s growing customer base.

Nobody can see into the future, and maybe Slack does IPO and takes its turn as a public company, but it surely wouldn’t be a surprise if someone came along with an offer it couldn’t refuse, whatever that figure might be.


Source: The Tech Crunch

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Equity Shot: All about Slack’s confidential IPO filing

Posted by on Feb 4, 2019 in Equity podcast, Podcasts, slack, TC | 0 comments

Hello, and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

Today we’re bringing back an old Equity format: The Shot.

No, I haven’t started drinking again. Equity Shots are short takes on breaking news. And no news was more explosive recently than word that Slack has filed to go public confidentially. Confidentially in that we don’t get to see the numbers (yet), but publicly in that the company went ahead and told the world that it had filed, privately, with the SEC.

Which, as our own Danny Crichton points out, is open once again now that the government has reopened.

If you want to follow along with the numbers as we talk, this post is where most of my notes are, and you can read all of TechCrunch’s Slack coverage here.

We’re back in a flash with our regular weekly episode on Friday. Stay cool!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.


Source: The Tech Crunch

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Slack now has more than 10 million daily active users

Posted by on Jan 29, 2019 in slack, TC | 0 comments

As Slack reportedly readies itself for an entry to the public markets, the high-flying startup is ready to brag a little bit about what it has accomplished in the past year.

In a blog post, the company shared that it now has 10 million daily active users on the platform, up from 8 million DAUs in May. It’s not just tech companies in Silicon Valley using the service either, the company broke down the number a bit, clarifying that more than half of the DAUs are from outside the United States.

User numbers via Slack

We didn’t get an update on the number of paid users — the company also shared in May that it had 3 million paying users — but the company did say that the number of organizations on the platform has grown to 85,000, a 50 percent over the past year. The company’s major challenge of the past couple years has been bringing on more big companies to its platform, it seems they’ve definitely had some success, detailing in the blog that 65 of the Fortune 100 companies were slacking away.

Even with its weird new logo, the company seems to be growing at a fairly consistent pace from a user standpoint. We got a look at how things were looking on the financial side via a recent report in The Information, which forecast its 2019 revenue at $640 million and detailed that the company had over $900 million in cash on its balance sheet.

The company was last valued at more than $7 billion.


Source: The Tech Crunch

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TechCrunch Conversations: Direct listings

Posted by on Jan 19, 2019 in Airbnb, Banking, Barbara Gray, Barry McCarthy, Brady Capital Research, Brookline Capital Markets, chegg, Community, Cooley, Cooley LLP, Eric Jensen, Finance, funding, Government, Graham Powis, initial public offering, IPO, Jay R. Ritter, Jay Ritter, Josh Kuzon, Netflix, Pandora, Policy, Private Equity, Reciprocal Ventures, secondaries, slack, Spotify, Spotify IPO, Startup Initial Public Offering, TC, Technology Crossover Ventures, university of florida, Venture Capital | 1 comment

Last April, Spotify surprised Wall Street bankers by choosing to go public through a direct listing process rather than through a traditional IPO. Instead of issuing new shares, the company simply sold existing shares held by insiders, employees and investors directly to the market – bypassing the roadshow process and avoiding at least some of Wall Street’s fees. That pattens is set to continue in 2019 as Silicon Valley darlings Slack and Airbnb take the direct listing approach.

Have we reached a new normal where tech companies choose to test their own fate and disrupt the traditional capital markets process?  This week, we asked a panel of six experts on IPOs and direct listings: “What are the implications of direct listing tech IPOs for financial services, regulation, venture capital, and capital markets activity?” 

This week’s participants include: IPO researcher Jay R. Ritter (University of Florida’s Warrington College of Business), Spotify’s CFO Barry McCarthy, fintech venture capitalist Josh Kuzon (Reciprocal Ventures), IPO attorney Eric Jensen (Cooley LLP), research analyst Barbara Gray, CFA (Brady Capital Research), and capital markets advisor Graham A. Powis (Brookline Capital Markets).

TechCrunch is experimenting with new content forms. Consider this a recurring venue for debate, where leading experts – with a diverse range of vantage points and opinions – provide us with thoughts on some of the biggest issues currently in tech, startups and venture. If you have any feedback, please reach out: Arman.Tabatabai@techcrunch.com.


Thoughts & Responses:


Jay R. Ritter

Jay Ritter is the Cordell Eminent Scholar at the University of Florida’s Warrington College of Business. He is the world’s most-cited academic expert on IPOs. His analysis of the Google IPO is available here.

In April last year, Spotify stock started to trade without a formal IPO, in what is known as a direct listing. The direct listing provided liquidity for shareholders, but unlike most traditional IPOs, did not raise any money for the company. Slack has announced that they will also conduct a direct listing, and it is rumored that some of the other prominent unicorns are considering doing the same.

Although no equity capital is raised by the company in a direct listing, after trading is established the company could do a follow-on offering to raise money. The big advantage of a direct listing is that it reduces the two big costs of an IPO—the direct cost of the fees paid to investment bankers, which are typically 7% of the proceeds for IPOs raising less than $150 million, and the indirect cost of selling shares at an offer price less than what the stocks subsequently trades at, which adds on another 18%, on average. For a unicorn in which the company and existing shareholders sell $1 billion in a traditional IPO using bookbuilding, the strategy of a direct listing and subsequent follow-on offering could net the company and selling shareholders an extra $200 million.

Direct listings are not the only way to reduce the direct and indirect costs of going public. Starting twenty years ago, when Ravenswood Winery went public in 1999, some companies have gone public using an auction rather than bookbuilding. Prominent companies that have used an auction include Google, Morningstar, and Interactive Brokers Group. Auctions, however, have not taken off, in spite of lower fees and less underpricing. The last few years no U.S. IPO has used one.

Traditional investment banks view direct listings and auction IPOs as a threat. Not only are the fees that they receive lower, but the investment bankers can no longer promise underpriced shares to their hedge fund clients. Issuing firms and their shareholders are the beneficiaries when direct listings are used.

If auctions and direct listings are so great, why haven’t more issuers used them? One important reason is that investment banks typically bundle analyst coverage with other business. If a small company hires a top investment bank such as Credit Suisse to take them public with a traditional IPO, Credit Suisse is almost certainly going to have its analyst that covers the industry follow the stock, at least for a while. Many companies have discovered, however, that if the company doesn’t live up to expectations, the major investment banks are only too happy to drop coverage a few years later. In contrast, an analyst at a second-tier investment bank, such as William Blair, Raymond James, Jefferies, Stephens, or Stifel, is much more likely to continue to follow the company for many years if the investment bank had been hired for the IPO. In my opinion, the pursuit of coverage from analysts at the top investment banks has discouraged many companies from bucking the system. The prominent unicorns, however, will get analyst coverage no matter what method they use or which investment banks they hire.


Barry McCarthy

Barry McCarthy is the Chief Financial Officer of Spotify. Prior to joining Spotify, Mr. McCarthy was a private investor and served as a board member for several major public and private companies, including Spotify, Pandora and Chegg. McCarthy also serves as an Executive Adviser to Technology Crossover Ventures and previously served as the Chief Financial Officer and Principal Accounting Officer of Netflix.

If we take a leap of faith and imagine that direct listings become an established alternative to the traditional IPO process, then we can expect:

  1. Financing costs to come down – The overall “cost” of the traditional IPO process will come down, in order to compete with the lower cost alternative (lower underwriting fees and no IPO discount) of a direct listing.
  2. The regulatory framework to remain unchanged – No change was / is required in federal securities laws, which already enable the direct listing process. With the SEC’s guidance and regulatory oversight, Spotify repurposed an existing process for direct listings – we didn’t invent a new one.

  3. A level playing field for exits – Spotify listed without the traditional 180 day lock-up. In order to compete with direct listings, traditional IPOs may eliminate the lock-up (and the short selling hedge funds do into the lock-up expiry).

  4. Financing frequency; right church, wrong pew – Regardless of what people tell you, an IPO is just another financing event. But you don’t need to complete a traditional IPO anymore if you want to sell equity. Conventional wisdom says you do, but I think conventional wisdom is evolving with the realities of the marketplace. Here’s how we’d do it at Spotify if we needed to raise additional equity capital. We’d execute a secondary or follow-on transaction, pay a 1% transaction fee and price our shares at about a 4% discount to the closing price on the day we priced our secondary offering. This is much less expensive “financing” than a traditional IPO with underwriter fees ranging from 3-7% (larger deals mean smaller fees) and the underwriter’s discount of ~36% to the full conviction price for the offering. You simply uncouple the going public event from the money raising event.


Josh Kuzon

Josh Kuzon is a Partner at Reciprocal Ventures, an early stage venture capital firm based in NYC focused on FinTech and blockchain. An expert in payments and banking systems, Josh is focused on backing the next generation of FinTech companies across payments, credit, financial infrastructure, and financial management software.

I think the implications of direct listing tech IPOs are positive for venture capitalists, as it creates a channel for efficient exits. However, the threat of low liquidity from a direct listing is significant and may ultimately outweigh the benefits for the listing company. 

Direct listing tech IPOs offers a compelling model for company employees and existing investors in pursuit of a liquidity event. The model features a non-dilutive, no lock-up period, and underwriting fee-less transaction, which is a short-term benefit of the strategy. Additionally, as a publicly traded company, there are longer-term benefits in being able to access public markets for financing, using company stock to pay for acquisitions, and potentially broaden global awareness of an organization. However, these benefits come with tradeoffs that should not be overlooked. 

One concern is the circular problem of liquidity. Without a defined supply of stock, it can be difficult to generate meaningful buyside demand. A floating price and indeterminate quantity will dampen institutional interest, no matter how great the listing company may be. Institutions require size and certainty; not only do they desire to build large positions, but they need to know they can exit them if needed. Without consistent institutional bids, sellers are less motivated to unwind their stakes, for fear of volatility and soft prices.

I believe institutional investors and their brokers are crucial ingredients for a properly functioning public equities market structure. They help make markets more liquid and efficient and serve as a check on companies to drive better business outcomes for their shareholders. A lack of institutional investors could be a very expensive long-term tradeoff for a short-term gain.

For companies that have significant brand awareness, don’t need to raise additional capital, or already have a diverse institutional investor base, the direct listing model may work out well for them. Few companies, however, fit this profile. Many more will likely have to work a lot harder to persuade the capital markets to participate in a direct listing and even if successful, may ultimately come back to bite them as they evolve and require additional capital markets cooperation.


Eric Jensen

Eric Jensen is a partner at Cooley LLP. He advises leading technology entrepreneurs, venture funds and investment banks in formation, financing, capital market and M&A transactions, and in in the past seven years was involved in over 55 offerings, raising over $21 billion, for companies such as Appian, Atlassian, Alteryx, Avalara, DocuSign, FireEye, Forty Seven, LinkedIn, MongoDB, NVIDIA, Redfin, SendGrid, ServiceNow, Tenable, Zendesk, Zulilly and Zynga.

It is challenging to draw market lessons from a single completed “direct listing.” The degree of interest I am seeing, often without folks knowing what it means, shows that the IPO model has issues. So first I describe to a client what it means – an IPO without the “I” and the “O”, meaning you are not selling any stock and therefore you don’t have a set initial stock price. These factors mean that a direct listing is relevant only for a small subset of private companies – those that:

  1. Sold stock to a number of institutional buyers that are likely to hold or increase their interest once trading begins;
  2. Are large enough (and didn’t restrict transfers) such that an active trading market developed as a private company, to be used as a proxy for the public trading price;
  3. Don’t need to raise primary capital, and
  4. Want to make their mark by doing something different, at the expense of placing IPO stock in the hands of new investors they have selected.

There is no evidence to indicate that it accelerates public market access, any company that can do a direct listing could do an IPO. The SEC doesn’t go away, and compared to the highly tuned IPO process, SEC scrutiny is actually higher. As least based on Spotify, it doesn’t put investment bankers out of a job, nor does it dramatically reduce total transactions costs. Spotify had no lock-up agreement, so the VCs I know love this feature, but it is not inherent in a direct listing, and IPOs don’t require lock-ups.

In my book, too soon to tell if it is the reverse Dutch Auction of its day.


Barbara Gray

Barbara Gray, CFA is a former top-ranked sell-side Equity Analyst and the Founder of Brady Capital Research Inc., a leading-edge investment research firm focused on structural disruption. She is also the author of the books Secrets of the Amazon 2.0, Secrets of the Amazon and Ubernomics.

Although Spotify successfully broke free of its reins last April and entered the public arena unescorted, I expect most unicorns will still choose to pay the fat underwriting fees to be paraded around by investment bankers. 

Realistically, the direct listing route is most suitable for companies meeting the following three criteria: 1) consumer-facing with strong brand equity; 2) easy-to-understand business model; and 3) no need to raise capital. Even if a company meets this criteria, the “escorted” IPO route could provide a positive return on investment as the IPO roadshow is designed to provide a valuation uptick through building awareness and preference versus competitive offerings by enabling a company to: a) reach and engage a larger investment pool; b) optimally position its story; and c) showcase its skilled management team.

Although the concept of democratizing capital markets by providing equal access to all investors is appealing, if a large institution isn’t able to get an IPO allocation, they may be less willing to build up a meaningful position in the aftermarket. The direct listings option also introduces a higher level of pricing risk and volatility as the opening price and vulnerable early trading days of the stock are left to the whims of the market. Unlike with an IPO, with benefits of stabilizing bids and 90 to 180 days lock-up agreements prohibiting existing investors from selling their shares, a flood of sellers could hit the market.


Graham Powis

Graham A. Powis is Senior Capital Markets Advisor at Brookline Capital Markets, a division of CIM Securities, LLC. Brookline is a boutique investment bank that provides a comprehensive suite of capital markets and advisory services to the healthcare industry. Mr. Powis previously held senior investment banking positions at BTIG, Lazard and Cowen.

While Spotify’s direct listing in 2018 and recent reports that Slack is considering a direct listing in 2019 have heightened curiosity around this approach to “going public,” we expect that most issuers in the near-to medium-term will continue to pursue a traditional IPO path. Potential benefits of a direct listing include the avoidance of further dilution to existing holders and underwriter fees. However, large, high-profile and well-financed corporations, most often in the technology and consumer sectors, are the companies typically best-suited to pursue these direct listings. By contrast, smaller companies seeking to raise capital alongside an exchange listing, and with an eye on overcoming challenges in attracting interest from the investing public, will continue to follow a well-established IPO process.

A case in point is the healthcare segment of the US IPO market, which has accounted for one-third of all US IPO activity over the last five years. The healthcare vertical tilts toward small unprofitable companies with significant capital needs and, as a result, direct listings aren’t likely to become a popular choice in that industry. Since 2014, unprofitable companies have accounted for more than 90% of all healthcare IPOs completed. Furthermore, the biotechnology subsector has been by far the most active corner of the healthcare IPO market, and biotechnology companies are voracious consumers of capital. Finally, healthcare IPOs tend to be relatively small: since 2014, healthcare IPO issuers have raised, on average, only 47% of the amount raised by non-healthcare issuers, and more than half have already returned to the market at least once for additional capital.


Source: The Tech Crunch

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Startups Weekly: Squad’s screen-shares and Slack’s swastika

Posted by on Jan 19, 2019 in alex wilhelm, altos ventures, AnchorFree, Andreessen Horowitz, Autotech Ventures, Aviva Ventures, berlin, bird, bluerun ventures, Business, ceo, Ciitizen, crowdstrike, CrunchBase, economy, editor-in-chief, entrepreneurship, Finance, First Round Capital, Flash, France, Greenspring Associates, Ingrid Lunden, Italy, josh constine, Lance Armstrong, Maverick Ventures, Next Ventures, norwest venture partners, Portugal, Private Equity, redpoint ventures, resolute ventures, Rubrik, series C, slack, slow ventures, Spain, Startup company, Startups, switzerland, Tandem Capital, TC, TechStars, tools, unicorn, valar ventures, Venture Capital, zack Whittaker | 0 comments

We’re three weeks into January. We’ve recovered from our CES hangover and, hopefully, from the CES flu. We’ve started writing the correct year, 2019, not 2018.

Venture capitalists have gone full steam ahead with fundraising efforts, several startups have closed multi-hundred million dollar rounds, a virtual influencer raised equity funding and yet, all anyone wants to talk about is Slack’s new logo… As part of its public listing prep, Slack announced some changes to its branding this week, including a vaguely different looking logo. Considering the flack the $7 billion startup received instantaneously and accusations that the negative space in the logo resembled a swastika — Slack would’ve been better off leaving its original logo alone; alas…

On to more important matters.

Rubrik more than doubled its valuation

The data management startup raised a $261 million Series E funding at a $3.3 billion valuation, an increase from the $1.3 billion valuation it garnered with a previous round. In true unicorn form, Rubrik’s CEO told TechCrunch’s Ingrid Lunden it’s intentionally unprofitable: “Our goal is to build a long-term, iconic company, and so we want to become profitable but not at the cost of growth,” he said. “We are leading this market transformation while it continues to grow.”

Deal of the week: Knock gets $400M to take on Opendoor

Will 2019 be a banner year for real estate tech investment? As $4.65 billion was funneled into the space in 2018 across more than 350 deals and with high-flying startups attracting investors (Compass, Opendoor, Knock), the excitement is poised to continue. This week, Knock brought in $400 million at an undisclosed valuation to accelerate its national expansion. “We are trying to make it as easy to trade in your house as it is to trade in your car,” Knock CEO Sean Black told me.

Cybersecurity stays hot

While we’re on the subject of VCs’ favorite industries, TechCrunch cybersecurity reporter Zack Whittaker highlights some new data on venture investment in the industry. Strategic Cyber Ventures says more than $5.3 billion was funneled into companies focused on protecting networks, systems and data across the world, despite fewer deals done during the year. We can thank Tanium, CrowdStrike and Anchorfree’s massive deals for a good chunk of that activity.

Send me tips, suggestions and more to kate.clark@techcrunch.com or @KateClarkTweets

Fundraising efforts continue

I would be remiss not to highlight a slew of venture firms that made public their intent to raise new funds this week. Peter Thiel’s Valar Ventures filed to raise $350 million across two new funds and Redpoint Ventures set a $400 million target for two new China-focused funds. Meanwhile, Resolute Ventures closed on $75 million for its fourth early-stage fund, BlueRun Ventures nabbed $130 million for its sixth effort, Maverick Ventures announced a $382 million evergreen fund, First Round Capital introduced a new pre-seed fund that will target recent graduates, Techstars decided to double down on its corporate connections with the launch of a new venture studio and, last but not least, Lance Armstrong wrote his very first check as a VC out of his new fund, Next Ventures.

More money goes toward scooters

In case you were concerned there wasn’t enough VC investment in electric scooter startups, worry no more! Flash, a Berlin-based micro-mobility company, emerged from stealth this week with a whopping €55 million in Series A funding. Flash is already operating in Switzerland and Portugal, with plans to launch into France, Italy and Spain in 2019. Bird and Lime are in the process of raising $700 million between them, too, indicating the scooter funding extravaganza of 2018 will extend into 2019 — oh boy!

Startups secure cash

  • Niantic finally closed its Series C with $245 million in capital commitments and a lofty $4 billion valuation.
  • Outdoorsy, which connects customers with underused RVs, raised $50 million in Series C funding led by Greenspring Associates, with participation from Aviva Ventures, Altos Ventures, AutoTech Ventures and Tandem Capital.
  • Ciitizen, a developer of tools to help cancer patients organize and share their medical records, has raised $17 million in new funding in a round led by Andreessen Horowitz.
  • Footwear startup Birdies — no, I don’t mean Allbirds or Rothy’s — brought in an $8 million Series A led by Norwest Venture Partners, with participation from Slow Ventures and earlier investor Forerunner Ventures.
  • And Brud, the company behind the virtual celebrity Lil Miquela, is now worth $125 million with new funding.

Feature of the week

TechCrunch’s Josh Constine introduced readers to Squad this week, a screensharing app for social phone addicts.

Listen to me talk

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 marveled at the dollars going into scooter startups, discussed Slack’s upcoming direct listing and debated how the government shutdown might impact the IPO market.

Want more TechCrunch newsletters? Sign up here.

Source: The Tech Crunch

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Slack shuts down accounts belonging to Iranian expats and users who visited Iran

Posted by on Dec 20, 2018 in Government, Iran, slack, TC | 0 comments

A number of Slack users report that they have suddenly lost access to their accounts with no warning in what appears to be an aggressive implementation of U.S. sanctions on Iran.

In some cases, users have reported seeing revoked their access to free, public Slack groups, while access to paid accounts remains. Administrators of the public accounts were not notified of the account terminations affecting their group’s members. Affected users include a University of British Columbia PhD student, a researcher studying at the Technical University of Munich and many other Twitter users who reported personal travel to Iran in recent years. Affected users reported receiving the following letter:

When questioned about the recent action taken against some users, Slack provided TechCrunch the following statement:

Slack complies with the U.S. regulations related to embargoed countries and regions, as does every U.S.-based company. We updated our system for applying geolocation information, which relies on IP addresses, and that led to the deactivations for accounts tied to embargoed countries. We only utilize IP addresses to take these actions. We do not possess information about nationality or the ethnicity of our users. If users think we’ve made a mistake in blocking their access, please reach out to feedback@slack.com and we’ll review as soon as possible.

Right now, it looks like any travel to Iran (and the associated Iranian IP address) were sufficient to flag an account under Slack’s new geolocation update that triggered the bans. We’ve reached out to Slack with additional questions about when these accounts should expect to be reinstated, assuming that Slack doesn’t double down on its aggressive policy implementation.


Source: The Tech Crunch

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Report: Pinterest may go public as soon as April

Posted by on Dec 19, 2018 in Bessemer Venture Partners, Exit, Facebook, Goldman Sachs, Google, Lyft, Pinterest, slack, Startups, TC, the wall street journal, Uber, Venture Capital | 0 comments

Pinterest may follow Lyft and Uber to the public markets in the first half of 2019, according to a report from The Wall Street Journal.

The visual search engine and shopping tool is expected to tap underwriters in January and complete an initial public offering as soon as April. The company was valued at just over $12 billion with its last private fundraise, a $150 million round in mid-2017, and is on pace to bring in $700 million in revenue this year.

The company, founded in 2008 by Ben Silbermann (pictured), is also in talks to secure a $500 million credit line, per the report, not an uncommon move for a pre-IPO giant like Pinterest.

To date, the company has raised nearly $1.5 billion from key stakeholders such as Bessemer Venture Partners, Andreessen Horowitz, FirstMark Capital, Fidelity and SV Angel.

Pinterest recently reached 250 million monthly active users, up from 200 million in 2017.

This year, it launched several new features to make it easier for passive Pinterest users to actually buy products on the platform, and introduced the “following” tab, where users could view only the content from brands and people they follow. It also added the Pinterest Propel program as part of an effort to create more local content for its users, and implemented full-screen video ads to beef up its advertising options — an area where it competes directly with Facebook and Google.

2019 is poised to be a banner year for venture-backed IPOs. Both Uber and Lyft are in IPO registration, filing privately to go public within hours of each other earlier this month, and Slack, too, has reportedly hired Goldman Sachs to lead its 2019 float.

Pinterest declined to comment.


Source: The Tech Crunch

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Report: Slack is prepping an IPO for next year, with Goldman Sachs as its lead underwriter

Posted by on Dec 8, 2018 in slack, TC | 0 comments

Slack, the workplace messaging company, has hired investment bank Goldman Sachs to lead its IPO next year, according to a Reuters report. Reuters’ sources say the company is hoping to nab a valuation of “well over $10 billion.”

The WSJ reported back in September that Slack was “actively preparing” for an IPO in the first half of next year, with an eye toward going public as early as the first quarter. It said, too, that the company thought it could achieve a valuation well in excess of the $7.1 billion that it was last assigned by private market investors.

Slack, which is based in San Francisco and Vancouver, revealed back in May that it had 8 million daily active users. At the time, it said that 3 million of its users were also, crucially, paid users.

In August, when the company announced its most recent funding round of $427 million, it told the New York Times that it still had eight million daily users, though it noted that it had just half that number in the summer of 2017.

Slack’s investors include SoftBank Group’s Vision Fund, Dragoneer Investment Group, General Atlantic, T. Rowe Price Associates, Wellington Management, Baillie Gifford, and Sands Capital, with much earlier investment coming from Accel Partners and Andreessen Horowitz (a16z).

In fact, when Accel and a16z funded Slack, it was technically a different company, one called Tiny Speck, and it worked long and hard on an online, multiplayer game called “Glitch” that failed to gain enough user traction to be continued.

It was only in the process of unwinding the company that it occurred to founder Stewart Butterfield that the messaging infrastructure he had created to privately communicate with Tiny Speck’s engineers and other employees might be an even more promising idea to pursue.

Butterfield had discussions with these early investors about returning their capital as he prepared to change course. As Accel’s Andrew Braccia told us several years ago, “We had a discussion about, ‘Should I return the money.’” But, said Braccia, “I told Stewart, ‘If you want to continue to be an entrepreneur and build something, then I’m with you.’”

It was a smart move on the part of Braccia, who spent nine years at Yahoo as a VP before joining Accel and met Butterfield there after Butterfield, with cofounder Caterina Fake, had sold their photo-sharing business Flickr to the company.

It was also a giant leap of faith, based on Butterfield’s potential alone. “I don’t think we understood how valuable, important, or fast it would grow,” Braccia admitted during that sit-down several years ago. “We just knew the use case was really strong at Tiny Speck and that if it was strong there, perhaps it could be strong other places, too.”

Slack’s thousands of customers include Airbnb, Time, Samsung, and Oracle, and it has reason to think it will be well-received in the market, judging by its popularity with those users and the performance of numerous other subscription-based enterprise software companies to go public in 2018, including Dropbox, Zuora, and DocuSign.

That said, the market may well be shifting, judging by the recent performance of the U.S. stock markets. Stocks dropped sharply today, capping what has been a stomach-churning week for Wall Street. In fact, a disappointing jobs report and strained U.S-China trade tensions appeared largely responsible for sending the Dow Jones Industrial Average to such a low point that it erased its gains for the year.


Source: The Tech Crunch

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