Daily Archives: February 23, 2021

News: Oscar Health’s initial IPO price is so high, it makes me want to swear

• February 23, 2021
• by:   
• in:  Blog 
• note:  no comments 

Amidst all the hype that Lemonade (IPO), Root (IPO), Metromile (SPAC-led debut) and other insurtech players have generated in the last year, it’s been easy to forget about Oscar Health. But now that the company founded in 2012 is approaching the public markets, one of the early tech-themed insurance companies is catching up on the

Amidst all the hype that Lemonade (IPO), Root (IPO), Metromile (SPAC-led debut) and other insurtech players have generated in the last year, it’s been easy to forget about Oscar Health. But now that the company founded in 2012 is approaching the public markets, one of the early tech-themed insurance companies is catching up on the attention front.

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

There is some naughty language in The Exchange today. It is necessary. We’ll get back to PG-ifying this column tomorrow. — Alex

So this morning we’re digging into Oscar Health’s first IPO pricing interval, hoping to understand how the market is valuing its unprofitable health-insurance enterprise.

Recall that Oscar Health was valued at around $3.2 billion in March of 2018. That datapoint, via PitchBook, is dated. Oscar Health raised hundreds of millions since (per several venture-capital tracking databases, including Crunchbase) but we lack a final private valuation for the company.

Regardless, with Oscar Health now targeting a $32 to $34 per-share IPO range, we can get our hands dirty.

Let’s get some valuation numbers and then decide if Oscar Health feels cheap or expensive at that price.

Billion-dollar IPO

Oscar Health is looking to reap as much as $1.21 billion in its IPO, a huge sum. The company is selling 30,350,920 shares, with 4,650,000 additional shares reserved for its underwriters. Existing shareholders are selling another 649,080 shares.

This means that after the IPO, Oscar Health will have 197,037,445 Class A and B shares in circulation, or 201,687,445 after counting shares reserved for its underwriters.

Using the company’s $32 to $34 per-share range, we can calculate a valuation minimum of $6.31 billion for the company (lower share count, low-end of price range) and $6.86 billion (higher share count, high-end of price range). That’s the company’s simple IPO valuation.

Oscar Health may also sell up to $375 million of its shares at its IPO price to three different funds. The company advises that the “indication of interest is not a binding agreement or commitment to purchase,” so we can ignore it for now.

News: The current narrative explaining why tech stocks are getting hammered

• February 23, 2021
• by:   
• in:  Blog 
• note:  no comments 

This morning the tech-heavy Nasdaq Composite index is off 2.34% after falling yesterday. Shares of Tesla are off more than 6% today, now mired in a bear-market correction after reaching new all-time highs earlier this year. Apple stock is worth $122.02 per share, down from over its recent highs of more than $145. After a

This morning the tech-heavy Nasdaq Composite index is off 2.34% after falling yesterday. Shares of Tesla are off more than 6% today, now mired in a bear-market correction after reaching new all-time highs earlier this year. Apple stock is worth $122.02 per share, down from over its recent highs of more than $145.

After a long period of time when it felt like tech stocks only went up, the recent correction is starting to feel material.

There are other ways to measure the selloff. Bessemer’s cloud index is off 4.5% today, after falling over 5% yesterday. And the now-infamous $ARKK, or ARK Innovation ETF that many investors have used as a proxy for growthy-tech stocks, is off 6.6% today after falling 5.9% yesterday.

Hell, even bitcoin has taken a pounding in the last few days, after its recent, relentless rise.

What’s driving the rapid turn-around in the value of tech companies, tech-focused indices, and tech-adjacents, like cryptocurrencies? Not merely one thing, of course, in an environment as complex as the world’s capital markets. But there is a rising narrative that you should consider.

Namely that the money-is-cheap-and-bond-yield-is-garbage-so-everyone-is-putting-money-into-stocks trade is losing steam. As some yields rise, bonds are become more attractive bets. And as COVID-19 vaccines roll out, some investors are pushing their stock-market bets into categories other than tech.

The result is that the landscape of value is shifting; the winds that were at the back of every tech company are receding, at least for now. If the changed weather persists until the very investment climate that tech stocks exist in reaches a new equilibrium, we could see the appetite for tech IPOs lessen, late-stage private valuations for startup shares dip, and more.

Here’s CNBC from earlier today on what’s changing:

Stocks dropped again on Tuesday as tech shares continued to tumble in the face of higher interest rates and a rotation into stocks more linked to the economic comeback.

Here’s the Wall Street Journal on the same theme, from yesterday:

The lift in yields largely reflects investor expectations of a strong economic recovery. However, the collateral damage could include higher borrowing costs for businesses, more options for investors who had seen few alternatives to stocks and less favorable valuation models for some hot technology shares, investors and analysts said.

And here’s Barrons from this morning, noting that what we’re seeing at home is not merely a US-issue:

While members of the NYSE FANG+ index including Tesla, Facebook and Apple have dropped sharply as the yield on the 10-year Treasury has climbed, the sector also is on the retreat overseas.

News: Twitter relaunches test that asks users to revise harmful replies

• February 23, 2021
• by:   
• in:  Blog 
• note:  no comments 

Twitter is running a new test that will ask users to pause and think before they tweet. According to the company’s announcement, when Twitter detects what appears to be a potentially harmful or offensive reply to someone else’s tweet, it will prompt you to consider revising your text instead of tweeting. Users whose tweets are

Twitter is running a new test that will ask users to pause and think before they tweet. According to the company’s announcement, when Twitter detects what appears to be a potentially harmful or offensive reply to someone else’s tweet, it will prompt you to consider revising your text instead of tweeting.

Users whose tweets are flagged in this way will see a pop-up message appear on their screen, which asks, “Want to review this before Tweeting?” There are three buttons to then choose from: one to tweet the reply anyway, an Edit button (this is as close as we’ll get, apparently), and a delete button to discard the tweet entirely. There is also a small link to report if the system got things wrong.

This is not the first time Twitter has run a test like this.

In May 2020 and again in August 2020, Twitter ran variations on this same experiment. In those cases, the text on the pop-up screen was largely the same, but the layout of the three buttons looked different and were less colorful.

The earlier tests ran on Android, iOS and web, but this current iteration is only on iOS, for the time being.

At the time of the initial test, Twitter explained its systems were able to detect harmful language based on the kind of language that had been used in other tweets that had been reported in the past.

It’s been shown that these sorts of built-in small nudges can have an impact.

For example, when Twitter began prompting users to read the article linked in a tweet before retweeting it, the company found that users would open the articles 40% more often than without the nudge. Twitter has also built similar experiments to try to slow down the pace of online conversation on its platform, by doing things like discouraging retweets without commentary or slow down “Likes” on tweets containing misinformation.

Other social networks use small nudges like this, too, to influence their users’ behavior. Instagram back in 2019 launched a feature that would flag potentially offensive comments before they were posted, and later expanded this to captions. TikTok more recently launched a banner that would ask users if they were sure they wanted to share a video that contains “unverified content.”

It’s unclear why Twitter hasn’t simply rolled out the pop-up to combat online abuse — still a serious issue on its platform — and then iterated on the design and style of the message box, as needed.

Compared with the much larger engineering and design efforts the company has had underway — including its newer Stories feature known as Fleets and a Clubhouse rival called Spaces — a box asking users to pause and think seems like something that could have graduated to a full product by now.

News: RIBS: The messaging framework for every company and product

• February 23, 2021
• by:   
• in:  Blog 
• note:  no comments 

Relevant. Inevitable. Believable. Simple. Behind most successful companies is a story that checks every one of those boxes.

Over more than two decades of advising founders, I’ve heard all kinds of stories — good, bad and everything in between. While everyone is different, I’ve noticed that the very best stories have something in common: They pass the RIBS test. I’ve talked a lot about this over the years, and it’s stood the test of time and trends.

The test is designed to tell you if your story is memorable (will it “stick to your ribs?”) so you can turn it into a compelling message. It looks something like this:

• Relevant
• Inevitable
• Believable
• Simple

Relevant

Before you can come up with a good story, you need to think about the audience. Who are you trying to reach? Are you solving a problem they care about? What matters to them about that problem? Why does your solution deserve attention?

Marc Benioff could have launched Salesforce by describing it as an online way for companies to manage relationships with their customers. It’s true and it would have been interesting, at least to some people. But instead, Marc went bigger: He ran a campaign that described Salesforce as the “end of software.”

At the time, software was everywhere and it was creating all kinds of problems: It was massively expensive, time consuming and prone to failure. By taking on those issues, Marc made the company instantly more relevant to a bigger market and audience. The conversation went from a discussion of feature checklists, contacts and leads, to how an entire industry would change. Marc looked like a visionary — and Salesforce seemed revolutionary.

Inevitable

News: Shippo raises $45M more at $495M valuation as ecommerce booms

• February 23, 2021
• by:   
• in:  Blog 
• note:  no comments 

This morning Shippo, a software company that provides shipping-related services to ecommerce companies, announced a new $45 million investment. The new capital values the startup at $495 million. TechCrunch is calling the new funding a Series D as it is a priced round that followed its Series C; the company did not award the round

This morning Shippo, a software company that provides shipping-related services to ecommerce companies, announced a new $45 million investment. The new capital values the startup at $495 million. TechCrunch is calling the new funding a Series D as it is a priced round that followed its Series C; the company did not award the round a moniker.

Shippo’s 2020 Series C, a $30 million transaction that was announced last April, valued the company at around $220 million. D1 Capital led both Shippo’s Series C and D rounds, implying that it was content to pay around twice as much for the company’s equity in 2021 than it was in 2020. (Recall that investors doubling-down on previous bets as lead investor in successive rounds is no longer considered to be a negative signal concerning startup quality, but a positive indicator.)

Why raise more money so soon after its last round? According to Shippo CEO and founder Laura Behrens Wu, her company made material progress on customer acquisition and partnerships last year. That led to a decision around the time of Shippo’s Q4 board meeting with her investors that it was a good time to put more capital into the company.

In a sense the timing is reasonable. As Shippo scales its customer base, it can negotiate better shipping deals with various providers, which, in turn, help it continue to attract new customers. Behrens Wu noted in an interview with TechCrunch that when her company was helping its early customers ship just a few packages, shipping companies it supports on its platform didn’t want to meet with the startup. Now armed with more volume, Shippo can recycle customer demand into partner leverage, improving its total customer offering.

Behrens Wu said that Shippo had secured such a partnership with UPS before it raised its new round.

Turning to growth, Shippo doubled its platform spend, or “GPV” last year. GPV is the company’s acronym for gross postage volume. It roughly tracks with revenue, TechCrunch confirmed. So Shippo likely doubled its top-line last year. That’s good. Shippo wants to do that again this year, Behrens Wu told TechCrunch. The startup will also double its headcount this year, adding around 150 people.

Now flush with more capital, what’s next for Shippo? Per its CEO, the startup wants to invest more in platforms (where Shippo is baked into a marketplace, for example), international expansion (Shippo only does a “little bit” of international shipping, per Behrens Wu), and double-down on what it considers its core customer base.

TechCrunch was curious about how broad Shippo might take its product from its original home in shipping labels. The startup said that there’s lots of room in the journey of a packaged, from pre-purchase on, where her company might expand into. However, Behrens Wu cautioned that such a broadening of product work is not an immediate focus at her company.

Let’s see how long the current ecommerce boom lasts and how far this new capital can take Shippo. If it doubles in size again this year we’ll have to start its IPO countdown sometime in mid-2022.

News: Wisetack raises $19M as its buy-now-pay-later service for IRL services scales

• February 23, 2021
• by:   
• in:  Blog 
• note:  no comments 

This morning Wisetack, a startup that provides buy-now-pay-later services to in-person business transactions, announced that is has closed a total of $19 million across two rounds, a seed investment and a Series A. Greylock led both rounds, with the seed round clocking in at $4 million and the Series A at $15 million. Bain Capital

This morning Wisetack, a startup that provides buy-now-pay-later services to in-person business transactions, announced that is has closed a total of $19 million across two rounds, a seed investment and a Series A.

Greylock led both rounds, with the seed round clocking in at $4 million and the Series A at $15 million. Bain Capital Ventures also took part in the company’s fundraising.

Notably both rounds were closed in 2019, making these amongst the more aged rounds that we’ve heard of in recent quarters. However, as much venture reporting was delayed last year due to the pandemic and political unsettlement, I am still willing to cover the occasional antique deal.

Wisetack caught our eye not only due to its fundraising activity, but also thanks the buy-now-pay-later (BNPL) space becoming all the more interesting in the wake of Affirm’s direct listing. Affirm is perhaps the best-known service of its type, making its liquidity moment — and post-IPO performance — impactful for its broader business category.

But while Affirm wants to offer point-of-sale BNPL services to online merchants, Wisetack is taking a different approach. It focuses on the in-person business world, helping finance consumer transactions involving things like home improvement and car repair; the sort of big transactions that your average family might not have the cash to cover but also doesn’t want to put on a credit card.

Wisetack partners with vertical SaaS players in different areas. Say, plumbing. This allows users of those vertical SaaS applications — the plumbers, sticking to the same example — to offer Wisetack’s BNPL service to their customers.

It’s well known that vertical SaaS has wide application. A favorite recent example is SingleOps, which provides software for the so-called “green industry,” the world of lawns and landscaping. There’s SaaS for all sorts of IRL work, which could mean that Wisetack has a good number of software providers to sell into.

The model appears to be working, at least thus far. Wisetack shared with TechCrunch that its loan volume rose 20x between January of 2020 and January of 2021. As the company generates revenues from merchants (loan processing costs), and consumer interest, it’s likely that its revenue scales with loan volume. If the relationship is even closer to direct, Wisetack grew quite a lot last year.

The startup also said that the number of businesses using Wisetack grew 25-fold last year to a number in the “thousands.”

Wisetack fits neatly into a number of recent trends. The first is its work with vertical SaaS, a notable slice of the software market. The second is that Wisetack is another example of an API-led business, offering its service as a tech-powered add-on to other bits of code. And, third, that Wisetack had the same lead investor twice in sequential rounds. This sort of doubling-down from the venture community has become common in recent quarters as the signaling risk of having the lead twice in a row has been zeroed out by general investor enthusiasm for more equity in what appear to be winning startups.

Finally, the Wisetack round is interesting as it is nearly a sort of vertical BNPL, or at least a vertically focused BNPL. The company was reticent to share notes on how it comes to credit decisions, but we presume that all BNPL players that do focus on a particular niche or segment.

News: Rode’s Wireless Go II delivers key upgrades to the best mobile mic for creators

• February 23, 2021
• by:   
• in:  Blog 
• note:  no comments 

Rode Microphones has a new and improved version of its much-loved Go portable mic, the Wireless Go II, which uses the same form factor as the original but adds a list of new and improved features. Most notably, the Go II offers two transmitter packs that can simultaneously talk to a single receiver, letting you

Rode Microphones has a new and improved version of its much-loved Go portable mic, the Wireless Go II, which uses the same form factor as the original but adds a list of new and improved features. Most notably, the Go II offers two transmitter packs that can simultaneously talk to a single receiver, letting you record two individual speakers to the same camera or connected device.

Basics

The Rode Wireless Go II ($299) ships with everything you need to begin recording high-quality audio to a camera or anything else that can connect to a 3.5mm jack. The transmitter packs – there are two of them in the box – have built-in microphones that offer great sound on their own, or you can use them with any 3.5mm-equipped lavalier mic depending on your needs.

The receiver pack can output to 3.5mm TRS, but it can also transmit using USB Type-C (which is also for charging). This is new for this generation, and Rode also sells USB-C to USB-C and USB-C to Lightning cables so that you can use them with modern Android devices, iPhones, iPads, Macs and PCs.

Image Credits: Rode

Each of the three packs has a built-in rechargeable battery that can provide up to 7 hours of operating time on a single charge. You can independently adjust the gain on each of the transmitters, and mute each individually or both from the receiver pack. You can also swap between mono recording with each transmitter as a channel, and stereo recording modes.

The transmitters can operate at a range of 200 meters (roughly 650 feet) from the receiver, provided they have line-of-sight, and the receiver has a display to show you input levels, battery status, connectivity and more. The transmitters each have two LEDs that provide visual feedback for connectivity and gain. Each also automatically records locally, with the ability to store more than 24 hours of audio on built-in storage in case of dropouts in connectivity.

Design and performance

With this update, it really feels like Rode has thought of everything. You can get started immediately, for one, since the transmitter packs and receiver come pre-paired and assigned to left and right channels by default. They’re incredibly user-friendly, and while Rode has introduced a new Windows and Mac app for centralized control of them called Rode Central, you don’t actually need any additional software to get started recording with them.

This updated version also uses a new RF transmission tech that has 128-bit encryption built in, with a much farther line-of-site range for their use. This is designed to make them much more reliable in areas where there’s a lot of RF traffic happening already – like a busy shopping mall (once COVID times are behind us), conference halls, or other public areas with lots of people and smartphones around.

The onboard memory is also new, and means you’ll never have to worry about any potential dropped connections since you’ll always have a local file to rely on on the transmitter packs themselves. A similar peace-of-mind feature is a safety channel that records a back-up track at -20db, so that if you encounter any overloud sounds that cause peaking in your primary recording, you’ll have another option. Both of these features have to be turned on proactively in the Rode Central app, which Rode will also use to deliver future firmware updates for the Go II, but they’re very welcome additions.

Image Credits: Darrell Etherington

Meanwhile, the best new feature might be that you get all these improvements in the same great package. Rode’s original Go was remarkable in large part because it came in such a small, portable package, with transmitters that featured built-in mics as well as being great body packs. The size here is exactly the same, and these use the same integrated clips that make them compatible with all of Rode’s existing Go accessories.

Bottom line

There’s a concept of ‘lapping’ in racing, where you’re so far ahead of a competitor that you overtake them again. That’s basically what Rode has done with the Go II, which pads the lead for the best mobile video/field podcasting mic on the market, with smart features that address the few downsides of the original.

News: FarmWise plans to add autonomous crop dusting to its suite of robotic services

• February 23, 2021
• by:   
• in:  Blog 
• note:  no comments 

The robotics revolution in farming is set to continue as the autonomous crop cultivation company FarmWise looks to add new capabilities to its autonomous farming equipment. The San Francisco-based company is currently testing the application of fungicides and insecticides to row crops as an additional capability for its weed-killing robots, according to company chief executive

The robotics revolution in farming is set to continue as the autonomous crop cultivation company FarmWise looks to add new capabilities to its autonomous farming equipment.

The San Francisco-based company is currently testing the application of fungicides and insecticides to row crops as an additional capability for its weed-killing robots, according to company chief executive Sébastien Boyer.

It’s the latest advancement in robotics for the farm — a market that’s becoming increasingly crowded with the launch of new companies like Future Acres, which launched its support robot Carry today, and Mineral, the spinout from Alphabet (Google’s parent company) that provides crop analysis.

Rather than sell robots directly to farmers, FarmWise sells its robotics services to farms, and charges farms roughly $200 per acre inspected and weeded. “We show up on farmers’ fields with our own operators and our own equipment,” Boyer said.

It’s a business model that has attracted $24 million in outside funding from firm’s including Playground Global and the company is likely going to raise another round, targeted at $20 million, later this year, according to Boyer.

Boyer says the company already counts half of the largest growers in Salinas, Calif. among the company’s customers. These are farms for big consumer vegetable companies like Dole.

What FarmWise hopes to do is fill gaps of missing labor, according to Boyer. Along with co-founder Thomas Palomares, Boyer said he identified a need for farms to keep up with their output while dealing with a shrinking workforce. “It’s about helping farmers keep up with work while the pool of people willing to do these jobs is shrinking,” he said.

Using the robots isn’t just good for farms’ bottom lines, Boyer said. It also helps reduce the amount of fertilizer and chemicals used on the farm, which is good for the environment and creates a more sustainable food chain, he said.

“I was attracted by working on a large-scale sustainability problem,” Boyer said.

News: ChargeLab raises seed capital to be the software provider powering EV charging infrastructure

• February 23, 2021
• by:   
• in:  Blog 
• note:  no comments 

As money floods into the electric vehicle market a number of small companies are trying to stake their claim as the go-to provider of charging infrastructure. These companies are developing proprietary ecosystems that work for their own equipment but don’t interoperate. ChargeLab, which has raised $4.3 million in seed financing led by Construct Capital and

As money floods into the electric vehicle market a number of small companies are trying to stake their claim as the go-to provider of charging infrastructure. These companies are developing proprietary ecosystems that work for their own equipment but don’t interoperate.

ChargeLab, which has raised $4.3 million in seed financing led by Construct Capital and Root Ventures, is looking to be the software provider providing the chargers built by everyone else.

“You’ll find everyone in every niche and corner,” says ChargeLab chief executive Zachary Lefevre. Lefevre likens Tesla to Apple with its closed ecosystem and compares Chargepoint and Blink, two other electric vehicle charging companies to Blackberry — the once dominant smartphone maker. “What we’re trying to do is be android,” Lefevre said.

That means being the software provider for manufacturers like ABB, Schneider Electric and Siemens. “These guys are hardware makers up and down the value stack,” Lefevre said.

ChargeLab already has an agreement with ABB to be their default software provider as they go to market. The big industrial manufacturer is getting ready to launch their next charging product in North America.

As companies like REEF and Metropolis revamp garages and parking lots to service the next generation of vehicles, ChargeLab’s chief executive thinks that his software can power their EV charging services as they begin to roll that functionality out across the lots they own.

Lefevre got to know the electric vehicle charging market first as a reseller of everyone else’s equipment, he said. The company had raised a pre-seed round of $1.1 million from investors including Urban.us and Notation Capital and has now added to that bank account with another capital infusion from Construct Capital, the new fund led by Dayna Grayson and Rachel Holt, and Root Ventures, Lefevre said.

Eventually the company wants to integrate with the back end of companies like Chargepoint and Electrify America to make the charging process as efficient for everyone, according to ChargeLab’s chief executive.

As more service providers get into the market, Lefevre sees the opportunity set for his business expanding exponentially. “Super open platforms are not going to be building an EV charging system any more than they would be building their own hardware,” he said.

News: 3D model provider CGTrader raises $9.5M Series B led by Evli Growth Partners

• February 23, 2021
• by:   
• in:  Blog 
• note:  no comments 

3D model provider CGTrader, has raised $9.5M in a Series B funding led by Finnish VC fund Evli Growth Partners, alongside previous investors Karma Ventures and LVV Group. Ex-Rovio CEO Mikael Hed also invested and joins as Board Chairman. We first covered the Vilnius-based company when it raised 200,000 euro from Practica Capital. Founded in

3D model provider CGTrader, has raised $9.5M in a Series B funding led by Finnish VC fund Evli Growth Partners, alongside previous investors Karma Ventures and LVV Group. Ex-Rovio CEO Mikael Hed also invested and joins as Board Chairman. We first covered the Vilnius-based company when it raised 200,000 euro from Practica Capital.

Founded in 2011 by 3D designer Marius Kalytis (now COO), CGTrader has become a signifiant 3D content provider – it even claims to be the world’s largest. In its marketplace are 1.1M 3D models and 3.5M 3D designers, service 370,000 businesses including Nike, Microsoft, Made.com, Crate & Barrel, and Staples.

Unlike photos, 3D models can also be used to create both static images as well as AR experiences, so that users can see how a product might fit in their home. The company is also looking to invest in automating 3D modeling, QA, and asset management processes with AI. 

Dalia Lasaite, CEO and co-founder of CGTrader said in a statement: “3D models are not only widely used in professional 3D industries, but have become a more convenient and cost-effective way of generating amazing product visuals for e-commerce as well. With our ARsenal enterprise platform, it is up to ten times cheaper to produce photorealistic 3D visuals that are indistinguishable from photographs.”

CGTrader now plans to consolidate its position and further develop its platform.

The company competes with TurboSquid (which was recently acquired for $75 million by Shutterstock) and Threekit.