Архив рубрики: Fundings & Exits

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Lime touts a 2020 turnaround and 2021 profitability

Micromobility company Lime says it has moved beyond the financial hardship caused by the COVID-19 pandemic, reaching a milestone that seemed unthinkable earlier this year.
In short, the company is now largely profitable.
Lime said it was both operating cash flow positive and free cash flow positive in the third quarter — a first — and is on pace to be full-year profitable, excluding certain costs (EBIT), in 2021.

During the WSJ Future of Everything event Thursday, Lime CEO Wayne Ting painted a far rosier picture of the company’s future than one might have expected.
There was a time when Bird and Lime, competing domestic scooter rental companies, were raising capital at a torrid pace, fighting for market share, regulatory breathing room and sidewalk real estate. Then, the pandemic hit and the companies had to take shelter.
Lime underwent a round of layoffs in April, taking on capital from Uber the next month in a down-round that brought its valuation under the $1 billion mark. As it announced in a blog post that TechCrunch reviewed before publication, it paused most of its operations for a month during the early COVID-19 days.
“It was certainly a very, very tough decision for us earlier this year and I know we weren’t the only company during COVID,” Ting said during the event. “I think it’s been in so many ways helpful to us to realize how hard these choices can be. We’re going to be growing headcount again. We’re going to do so in a careful way so that we’re not going have to make hard choices like the ones we made earlier this year.”
Now things are better, Lime says. Much better. Indeed, the company claims that it is the “first new mobility company to reach cash-flow positive for a full quarter.”
Cash flow positivity, in general, is an important threshold for a startup to reach as it implies that the company can largely self-fund from that point forward, limiting its dependency on external cash for survival.
Lime also claims that it “reached EBIT positive at the company level over the summer.” The specifics of the phrase “EBIT positive” are important. Was the company employing strict EBIT on its math and not discounting share-based compensation, or was it measuring using adjusted EBIT as many startups do, removing the cost of share-based compensation that shows up in GAAP results? According to the company the number did exclude share-based compensation, making the news slightly smaller.
Perhaps the most bullish data point from Lime is that it expects to be full-year profitable in 2021. TechCrunch asked for specifics because again how one measures profitability matters. It turns out, Lime is basing this projection on EBIT, as opposed to more traditional net income. For a startup this is not a surprising decision, but before we declare Lime fully “profitable,” we’ll want some more GAAP metrics.
Still, it appears that Lime is not going to die, and is, importantly, putting capital into developing new products. The company provided the first example of that new product pipeline on Thursday with the launch of the Gen4 scooter in Paris. It also teased a so-called “third and fourth mode” in the first quarter of 2021 as well as the addition of a swappable battery.
The scooter company wouldn’t give TechCrunch much information about what these third and fourth modes will be. The first two modes are bikes and scooters, which leaves skateboards, cars, flying cars and boats?
Lime did give TechCrunch a little bit of clarification, stating that “move beyond,” means the company will be operating an additional mode, accessed through the Lime app, in line with its goal to serve any trips under five miles. These modes will build on the Lime Platform play, but this will be operated by Lime rather than a partner.

Jump bikes are now on the Lime app and heading to more cities

Lime has long discussed reaching profitability. Perhaps because it and its competitor Bird were infamous for their losses during their early unicorn period.
By November of 2019, Lime was talking about reaching EBIT positivity in 2020. But the start of 2020 was not kind on the company, with 100 of its staff losing their jobs and 12 markets getting dropped. At the time TechCrunch wrote that “Lime is hoping to achieve profitability this year by laying off about 14% of its workforce and ceasing operations in 12 markets,” with the company itself writing at the time that “financial independence [was its] goal for 2020, and [that it was] confident that Lime will be the first next-generation mobility company to reach profitability.”
Depending on how you measure profitability, that could be true.
Things didn’t get easier for Lime later in the year. Its competitor Bird underwent layoffs, and Lime cut more staff in April. At the time, Lime said that it was focused on coming “back stronger than ever when this is over.”
The company is certainly in better shape than it was in April and May. So, how did Lime come back from the brink? In its own estimation, the company took time during its pause to “drill down on getting the business right, narrowing [its] focus and strengthening [its] fundamentals.” That might sound like corporate babble, but by taking a nearly full stop in its operating business, Lime could probably see a bit more clearly what was working and what was not. And with some cuts to what wasn’t, it could set up a future in which its operations were leaner, and more unit-economically positive.
And, now, here we are asking niggling questions about just what sort of profit Lime is really making. Instead of, you know, who might buy its leftover office furniture. It’s a nice turnaround.

Lime touts a 2020 turnaround and 2021 profitability

Cooper raises $2M to build a professional network centered on introductions

In a period of social distancing, making new professional connections feels harder than ever. So Amsterdam-based Cooper is building a network that’s all about making and receiving introductions.
“Everything that happens in the network is based on the foundation of introductions,” CEO Robert Gaal told me. “You should never get an unwanted message, and there’s no such thing as a connection request, because it’s not necessary if you have an introduction.”
The startup is launching internationally today and announcing that it has raised $2 million in seed funding.

Gaal (who co-founded the company with CTO Emiel van Liere) described Cooper as “a private professional network that’s not about how many connections do I have, it’s about bringing the people that you already trust into a circle.”
That’s in contrast with existing professional networking sites, which are most useful as “directories” of online résumés, and usually emphasize the quantity of connections, rather than the quality. (I’ll admit that on LinkedIn, I’m connected to a bunch of people I barely know.)
So Cooper tries to take the opposite approach, limiting users’ connections to people they really know. To do this, it can pull data from a user’s online calendar, and it also provides them with a personal invite code that they can share with their professional contacts.

Image Credits: Cooper

Users then post requests or opportunities, which are viewable by their connections and by friends of friends, who can offer to make useful introductions via email or in Cooper itself.
In fact, Gaal said that during the initial beta test, multiple people have successfully used Cooper to find new jobs — sometimes after pandemic-related layoffs, which they’re comfortable sharing with their inner circle but don’t want to broadcast to the world at large.
“There’s more discovery, more trust and you can reinvent other things on top of that — what the résumé is, what mentorship is — if you get trust right first,” he said.
Of course, simply sharing a calendar invite with someone doesn’t really mean you trust them or know them well. Cooper could eventually start looking at other measures that indicate your “connectivity” with someone, like how often you email with them, Gaal said — but the first step is simply recreating the professional circle in which you feel comfortable saying, “Oh, you’re looking for a job? My friend is hiring.”
Yes, those kinds of conversations are already happening offline, but he noted that most of us can only remember “a handful of people” at once. Cooper is making that “marketplace” much more visible and easy to track.
The startup doesn’t sell ads or user data. Instead, Gaal hopes to make money by charging membership fees for features like customizing your profile or promoting your request more broadly.
The startup’s seed funding was led by Comcast Ventures, with participation from LocalGlobe and 468 Capital.
“At a time when the ability to connect is limited, Cooper is building a professional network fostering meaningful and substantive connections,” said Daniel Gulati, founding partner at Forecast Fund and former managing director at Comcast Ventures, in a statement. “We are excited to support the team on their journey ahead.”

Upstream aims to be the new home for your professional social life

Cooper raises $2M to build a professional network centered on introductions

Linktree raises $10.7M for its lightweight, link-centric user profiles

Simple, link-centric user profiles might not sound like a particularly ambitious idea, but it’s been more than big enough for Linktree.
The Melbourne startup says that 8 million users — whether they’re celebrities like Selena Gomez and Dua Lipa or brands like HBO and Red Bull — have created profiles on the platform, with those profiles receiving more than 1 billion visitors in September.
Plus, there are more than 28,000 new users signing up every month.

“This category didn’t exist when we started,” CEO Alex Zaccaria told me. “We created this category.”
Zaccaria said that he and his co-founders Anthony Zaccaria and Nick Humphreys created Linktree to solve a problem they were facing at their digital marketing agency Bolster. Instagram doesn’t allow users to include links in posts — all you get is a single link in your profile, prompting the constant “link in bio” reminder when someone wants to promote something.
Meanwhile, most of Bolster’s clients come from music and entertainment, where a single link can’t support what Zaccaria said is a “quite fragmented” business model. After all, an artist might want to point fans to their latest streaming album, upcoming concert dates, an online store for merchandise and more. A website could do the job in theory, but they can be clunky or slow on mobile, with users probably giving up before they finally reach the desired page.

Linktree founders Anthony Zaccaria, Alex Zaccaria and Nick Humphreys. Image via Linktree.

So instead of constantly swapping out links in Instagram and other social media profiles, a Linktree user includes one evergreen link to their Linktree profile, which they can update as necessary. Selena Gomez, for example, links to her latest songs and videos, but also her Rare Beauty cosmetics brand, her official store and articles about her nonprofit work.
Zaccaria said that after launching the product in 2016, the team quickly discovered that “a lot more people had the same problem,” leading them to fully separate Linktree and Bolster two years ago. Since then, the company hasn’t raised any outside funding — until now, with a $10.7 million Series A led by Insight Partners and AirTree Ventures. (Update: Strategic investors in the round include Twenty Minute VC’s Harry Stebbings, Patreon CTO Sam Yam and Culture Amp CTO Doug English.)
“We had the option to just continue to grow sustainably, but we wanted to pour some fuel on the fire,” Zaccaria said.
In fact, Linktree has already grown from 10 to 50 employees this year. And while the company started out by solving a problem for Instagram users, Zaccaria described it as evolving into a much broader platform that can “unify your entire digital ecosystem” and “democratize digital presence.” He said that while some customers continue to maintain “a giant, brand-immersive website,” for others, Linktree is completely replacing the idea of a standalone website.
Zaccaria added that Instagram only represents a small amount of Linktree’s current traffic, while nearly 25% of that traffic now comes from direct visitors.

Image Credits: Linktree

Black Lives Matter has also been a big part of Linktree’s recent growth, with activists and other users who want to support the movement using their profiles to point visitors to websites where they can donate, learn more and get involved. In fact, Linktree even introduced a Black Lives Matter banner over the summer that anyone could add to their profile.
Linktree is free to use, but you have to pay $6 a month for Pro features like video links, link thumbnails and social media icons.
Zaccaria said that the new funding will allow the startup to add more “functionality and analytics.” He’s particularly eager to grow the data science and analytics team, though he emphasized that Linktree does not collect personally identifiable information or monetize visitor data in any way — he just wants to provide more data to Linktree users.
In a statement, Insight Managing Director Jeff Lieberman said:
As the internet becomes increasingly fragmented, brands, publishers, and influencers need a solution to streamline their content sharing and connect their social media followers to their entire online ecosystem, ultimately increasing brand awareness and revenue. Linktree has successfully created this new “microsite” category enabling companies to monetize the next generation of the internet economy via a single interactive hub. The impressive traction and growing number of customers Linktree has gained over the last few months demonstrates its proven market fit, and we could not be more excited to work with the Linktree team as they transition to the ScaleUp phase of growth.

Tap Bio’s mini-sites solve Instagram’s profile link problem

Linktree raises $10.7M for its lightweight, link-centric user profiles

Unity Software has strong opening, gaining 31% after pricing above its raised range

Whoever said you can’t make money playing video games clearly hasn’t taken a look at Unity Software’s stock price.
On its first official day of trading, the company rose more than 31%, opening at $75 per share before closing the day at $68.35. Unity’s share price gains came after last night’s pricing of the company’s stock at $52 per share, well above the range of $44 to $48 which was itself an upward revision of the company’s initial target.
Games like “Pokémon GO” and “Iron Man VR” rely on the company’s software, as do untold numbers of other mobile gaming applications that use the company’s toolkit for support. The company’s customers range from small gaming publishers to large gaming giants like Electronic Arts, Niantic, Ubisoft and Tencent.

Unity’s IPO comes on the heels of other well-received debuts, including Sumo Logic, Snowflake and JFrog .
TechCrunch caught up with Unity’s CFO, Kim Jabal, after-hours today to dig in a bit on the transaction.
According to Jabal, hosting her company’s roadshow over Zoom had some advantages, as her team didn’t have to focus on tackling a single geography per day, allowing Unity to “optimize” its time based on who the company wanted to meet, instead, of say, whomever was free in Boston or Chicago on a particular Tuesday morning.

Unity IPO aims to fuel growth across gaming and beyond

Jabal’s comments aren’t the first that TechCrunch has heard regarding roadshows going well in a digital format instead of as an in-person presentation. If the old-school roadshow survives, we’ll be surprised, though private jet companies will miss the business.
Talking about the transaction itself, Jabal stressed the connection between her company’s employees, value  and their access to that same value. Unity’s IPO was unique in that existing and former employees were able to trade 15% of their vested holdings in the company on day one, excluding “current executive officers and directors,” per SEC filings.
That act does not seemed to have dampened enthusiasm for the company’s shares, and could have helped boost early float, allowing for the two sides of the supply and demand curves to more quickly meet close to the company’s real value, instead of a scarcity-driven, more artificial figure.

Bear and bull cases for Unity’s IPO

Regarding Unity’s IPO pricing, Jabal discussed what she called a “very data-driven process.” The result of that process was an IPO price that came in above its raised range, and still rose during its first day’s trading, but less than 50%. That’s about as good an outcome as you can hope for in an IPO.
One final thing for the SaaS nerds out there. Unity’s “dollar-based net expansion rate” went from very good to outstanding in 2020, or in the words of the S-1/A:
Our dollar-based net expansion rate, which measures expansion in existing customers’ revenue over a trailing 12-month period, grew from 124% as of December 31, 2018 to 133% as of December 31, 2019, and from 129% as of June 30, 2019 to 142% as of June 30, 2020, demonstrating the power of this strategy.
We had to ask. And the answer, per Jabal, was a combination of the company’s platform strength and how customers tend to use more of Unity’s services over time, which she described as growing with their customers. And the second key element was 2020’s unique dynamics that gave Unity a “tailwind” thanks to “increased usage, particularly in gaming.”
Looking at our own gaming levels in 2020 compared to 2019, that checks out.
This post closes the book on this week’s IPO class. Tired yet? Don’t be. Palantir is up next, and then Asana .

Unity Software has strong opening, gaining 31% after pricing above its raised range

As low-code startups continue to attract VC interest, what’s driving customer demand?

Investor interest in no-code, low-code apps and services advanced another step this morning with Airtable raising an outsized round. The $185 million investment into the popular database-and-spreadsheet service comes as it adds “new low-code and automation features,” per our own reporting.
The round comes after we’ve seen several VCs describe no- and low-code startups as part of their core investing theses, and observed how the same investors appear to be accelerating their investing pace into upstart companies that follow the ethos.

The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

Undergirding much of the hype around apps that allow users to connect services, mix data sources and commit visual programming is the expectation that businesses will require more customized software than today’s developers will be able to supply. Low-code solutions could limit required developer inputs, while no-code services could obviate some need for developer time altogether. Both no- and low-code solutions could help alleviate the global developer shortage.
But underneath the view that there is a market mismatch between developer supply and demand is the anticipation that businesses will need more apps today than before, and even more in the future. This rising need for more business applications is key to today’s growing divergence between the availability and demand for software engineers.
The issue is something we explored talking with Appian, a public company that provides a low-code service that helps companies build apps.
Today we’re digging a little deeper into the topic, chatting with Mendix CEO Derek Roos. Mendix has reached nine-figure revenues with its low-code platform that helps other companies build apps, meaning that it has good perspective into what the market is actually demanding of itself and its low-code competition.
We want to learn a bit more about why business need so many apps, how COVID-19 has changed the low-code market and if Mendix is accelerating in 2020. If we can get all of that in hand, we’ll be better equipped to understand the growing no- and low-code startup realm.
A growing market
Mendix, based in Boston, raised around $38 million in known venture capital across a few rounds, including a $25 million Series B back in 2014. In 2018, Mendix partnered up with IBM to bring its service to their cloud, and later sold to Siemens for around $700 million the same year.

As low-code startups continue to attract VC interest, what’s driving customer demand?