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News: China Roundup: Beijing is tearing down the digital ‘walled gardens’

• September 18, 2021
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Hello and welcome back to TechCrunch’s China roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world. This week, China gets serious about breaking down the walled gardens that its internet giants have formed for decades. Two major funding rounds were announced,

Hello and welcome back to TechCrunch’s China roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world.

This week, China gets serious about breaking down the walled gardens that its internet giants have formed for decades. Two major funding rounds were announced, from the newly established autonomous driving unicorn Deeproute.ai and fast-growing, cross-border financial service provider XTransfer.

Tear down the walls

The Chinese internet is infamously siloed, with a handful of “super apps” each occupying a cushy, protective territory that tries to lock users in and keep rivals out. On Tencent’s WeChat messenger, for instance, links to Alibaba’s Taobao marketplace and ByteDance’s Douyin short video service can’t be viewed or even redirected. That’s unlike WhatsApp, Telegram or Signal that offer friendly URL previews within chats.

E-commerce platforms fend off competition in different ways. Taobao uses Alibaba’s affiliate Alipay as a default payments option, omitting its arch rival WeChat Pay. Tencent-backed JD.com, a rival to Alibaba, encourages its users to pay through its own payments system or WeChat Pay.

But changes are underway. “Ensuring normal access to legal URLs is the basic requirement for developing the internet,” a senior official from China’s Ministry of Industry and Information Technology said at a press conference this week. He added that unjustified blockages of web links “affect users’ experience, undermine users’ rights, and disrupt market orders.”

There is some merit in filtering third-party links when it comes to keeping out the likes of pornography, misinformation and violent content. Content distributors in China also strictly abide by censorship rules, silencing politically sensitive discussions. These principles will stay in place, and MIIT’s new order is really to crack anticompetitive practices and wane the power of the bloated internet giants.

The call to end digital walled gardens is part of MIIT’s campaign, started in July, to restore “orders” to the Chinese internet. While crackdowns on internet firms are routine, the spate of new policies announced in recent months — from new data security rules to heightened gaming restrictions — signify Beijing’s resolution to curb the influence of Chinese internet firms of all kinds.

The deadline for online platforms to unblock URLs is September 17, the MIIT said earlier. Virtually all the major internet companies have swiftly issued statements saying they will firmly carry out MIIT’s requirements and help promote the healthy development of the Chinese internet.

Internet users are bound to benefit from the dismantling of the walled gardens. They will be able to browse third-party content smoothly on WeChat without having to switch between apps. They can share product links from Taobao right within the messenger instead of having their friends copy-paste a string of cryptic codes that Taobao automatically generates for WeChat sharing.

Robotaxi dream

Autonomous driving startup Deeproute.ai said this week it has closed a $300 million Series B round from investors including Alibaba, Jeneration Capital, and Chinese automaker Geely. The valuation of this round was undisclosed.

We’ve seen a lot of publicity from Pony.ai, WeRide, Momenta and AutoX but not so much Deeproute.ai. That in part is because the company is relatively young, founded only in 2019 by Zhou Guang after he was “fired” by his co-founders at the once-promising Roadstar.ai amid company infighting.

Investors in Roadstar.ai reportedly saw the dismissal of Zhou as detrimental to the startup, which had raised at least $140 million up to that point, and subsequently sought to dissolve the business. It appears that Zhou, formerly the chief scientist at Roadstar, still commands the trust of some investors to support his reborn autonomous driving venture.

Like Pony.ai and WeRide, Deeproute is trying to operate its own robotaxi fleets. While the business model gives it control over reams of driving data, it’s research- and cash-intensive. As such, major Chinese robotaxi startups are all looking at faster commercial deployments, like self-driving buses and trucks, to ease their financial stress.

Cross-border trade boom

The other major funding news this week comes from Shanghai-based XTransfer, which helps small-and-medium Chinese exporters collect payments from overseas. The Series C round, led by D1 Partners, pulled in $138 million and catapulted Xtransfer’s valuation to over $1 billion. The proceeds will go towards product development, hiring and global expansion.

Founded by former executives from Ant Group, XTransfer tries to solve a pain point faced by small and medium exporters: opening and maintaining bank accounts in different countries can be difficult and costly. As such, XTransfer works as a payments gateway between its SME customer, the party that pays it, and their respective banks.

As of July, XTransfer’s customers had surpassed 150,000, most of which are in mainland China. The company of over 1,000 employees is also expanding into Southeast Asia.

While business-to-business export is booming in China, more and more products are also being directly sold from Chinese brands to consumers around the world. Some of the most successful examples, like Shein and Anker, use a different set of payments processors for their direct-to-consumer sales, which tend to be in bigger volume but smaller in average ticket value.

News: 1 change that can fix the VC funding crisis for women founders

• September 18, 2021
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We need to increase the number of women investing partners who can write large seed checks.

The venture capital industry as we know it is broken. At least for women, that is.

In terms of funding to women founders, 2020 was among the worst years on record. On a global level, only 9% of all funds deployed to technology startups went to founding teams that included at least one woman. Solo woman founders and all-women teams raised just 2% of all VC dollars, Crunchbase data showed.

Shockingly, this number is actually less than it was when we first started counting a decade ago, well before many high-profile diversity initiatives launched with the goal of fixing this very problem.

This funding gap isn’t just a moral crisis — it’s an economic one. The lack of investment into women-founded startups is a missed opportunity worth trillions of dollars. That’s because of overwhelming evidence that startups founded by women outperform startups founded by men: They generate more revenue, earn higher profits and exit faster at higher valuations. And they do all this while raising way less money.

What we’re doing isn’t working. Through research for my next book on women founders and funders, I kept asking myself the same question: When it comes to fixing the funding gap for women founders, what’s the one thing we can do that will make everything else easier or unnecessary?

I now believe that our best bet for long-term change is to focus our efforts on increasing the number of women investing partners who can write large seed checks. Here’s why.

Women investors are up to 3x more likely to fund women founders

Recently, one of the top VCs in the world told me how challenging it is to diversify his senior team. He expressed it as an accepted fact and a widespread belief. This is a common trope in Silicon Valley: Everyone wants gender diversity, but it’s so hard to find all the senior women!

In the venture capital industry, who you hire at the senior level is who you hang out with. And who you hire at the senior level determines who your fund will back.

Since studies now show that women investors are up to three times more likely to invest in women founders, it is clear that the fastest way to fund more women is to hire more women investing partners with check-writing ability. The effect to venture firms? Returns.

“When U.S. VC firms increased the proportion of female partners, they benefited with 9.7% more profitable exits and a 1.5% spike in overall fund returns annually,” explained Lisa Stone of WestRiver Group.

Data from All Raise and PitchBook reinforce the “correlation between hiring female decision-makers at the investment level and outperformance at the fund level,” adding that “69.2% of U.S. VCs that scored a top-quartile fund between 2009 and 2018 had women in decision-making roles.”

It shouldn’t be surprising that women investors are more likely to invest in women founders. That’s because humans have a propensity toward homophily — the tendency for like to attract like and for similarity to breed connection.

Homophily is why a vegan VC is more likely to invest in a vegan food tech, a gamer is more likely to hang out with gaming founders, or a parent is more likely to invest in a parent marketplace. People gravitate toward what they know.

Deena Shakir, who happens to be a woman and a mother, recently led Lux Capital’s investment into women’s health unicorn Maven. Shakir had multiple high-risk pregnancies with multiple complications, emergency C-sections, NICU stays and breastfeeding challenges.

“It is no coincidence that I am joined on Maven’s board of directors by four other mothers … and a brand-new father … whose personal journeys have also informed their professional conviction,” Shakir wrote in a Medium post.

Why seed checks have the greatest impact on the ecosystem

I believe that to fix the funding gap for women founders and jump-start the virtuous cycle of venture capital investing into women, we should focus on getting more seed checks into the hands of women founders. That’s because seed investing is a leading indicator of whether we are headed in the right direction in terms of closing the funding gap for women, according to Jenny Lefcourt, a partner at Freestyle and co-founder of All Raise, the leading nonprofit focused on diversifying the VC industry.

This doesn’t discount the importance of investments made into women founders at later stages. When a women founder lands Series D capital, it boosts this year’s numbers into women founders and likely brings that particular founder closer to a liquidity event that will lead her (and her executives) to invest in more women.

That said, the greatest impact on the future ecosystem will come from widening the top of the funnel and giving more women at the seed stage the shot to one day reach a momentous Series D funding like Maven. After all, who we fund now becomes who we fund later.

Why large seed checks matter most

Finally, the size of the check is also important when thinking about how to have the biggest impact on the ecosystem.

I know first-hand that microchecks are critical to building an inclusive ecosystem. When women invest at the seed level — in any amount — they jumpstart a virtuous cycle of women funding women. That’s why when I stepped in to lend a hand at my portfolio company when the solo woman founder took a parental leave, one of my key projects was to develop Jefa House, a way for Jefa’s own executives to easily invest in other women-founded startups.

That said, large party rounds made up entirely of small angel checks are few and far between. Similar challenges face small checks from emerging fund managers. Although the sheer number of emerging managers has increased 9x in seven years, the reality is that most emerging managers simply don’t have much money.

Are women venture capitalists who run their own microfunds more likely to invest in amazing women founders than Tier 1 funds with few or no women investing partners? Yes. Will it take them a long time to compete with those Tier 1 funds in terms of check size? Yes.

This is why it matters so much when leading funds hire or promote women to the partner level. Not only does it give women founders a better shot at funding from high-signal shops, but the moves that top funds make are key signals to others in the ecosystem: In venture capital, women investors don’t have to sit at the kids’ table.

Why we must hire women investing partners

We all know that great returns in early-stage venture capital come from making big bets on great ideas that others aren’t betting on. That is why VC investing is contrarian by definition. Thanks to our increasingly globalized world and clear data showing the importance of diverse teams to make good decisions to get those returns, no one in 2021 truly believes that single white dudes in Palo Alto have a monopoly on billion-dollar ideas.

However, due to the nature of homophily, venture capital remains a highly homogenous industry, and the social and economic interactions and decisions of human beings remain deeply swayed by these principles. No matter how much work we do, birds of a feather really do flock — and fund — together.

This all leads to one place: The clearest path to funding different kinds of founders with different kinds of ideas is to put different kinds of investors on the investing side of the table. To get more funding to women founders, we need more women who can write checks. That’s why prioritizing the hiring of women investing partners who can write large seed checks is key to fixing the funding crisis for women founders and increasing VC returns worldwide.

News: Google abused dominant position of Android in India, antitrust probe finds

• September 18, 2021
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Google has abused the dominant position of Android in India to illegally hurt competitors in the world’s second largest internet market, a two-year antitrust probe by nation’s watchdog has found. The Android-maker reduced device manufacturing firms’ ability and incentive to develop and sell devices operating on alternative versions of Android, the probe found, according to

Google has abused the dominant position of Android in India to illegally hurt competitors in the world’s second largest internet market, a two-year antitrust probe by nation’s watchdog has found.

The Android-maker reduced device manufacturing firms’ ability and incentive to develop and sell devices operating on alternative versions of Android, the probe found, according to two people have have been briefed on the findings.

Additionally, the report found Google’s move to make it mandatory for device manufacturers to pre-install its apps a violation of India’s competition law.

More than five dozen firms including Amazon and Apple responded to queries from the Indian watchdog — the Competition Commission of India — during the course of the investigation, the report said.

The Indian watchdog also found issues with the way Google has enforced policies on Play Store, saying those are “one-sided, ambiguous, vague, biased and arbitrary.”

Google said it looks forward to engage with the CCI to demonstrate how “Android has led to more competition and innovation, not less.”

The report’s findings — which are yet to be formally published by the CCI — is the latest setback for Google in India, where it has faced strong criticism from local entrepreneurs in recent quarters and several other antitrust probes.

The Alliance of Digital India Foundation, a group of 350 startups, founders and investors, lauded the CCI report’s findings and said the watchdog’s step “is in line with the Indian digital ecosystem’s needs.”

News: What we can learn from edtech startups’ expansion efforts in Europe

• September 18, 2021
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Unlike their neighbors in fintech, it’s assumed that edtech companies need to expand to a number of big markets in order to reach a scale that makes them attractive to VCs.

It’s a story common to all sectors today: investors only want to see ‘uppy-righty’ charts in a pitch. However, edtech growth in the past 18 months has ramped up to such an extent that companies need to be presenting 3x+ growth in annual recurring revenue to even get noticed by their favored funds.

Some companies are able to blast this out of the park — like GoStudent, Ornikar and YouSchool — but others, arguably less suited to the conditions presented by the pandemic, have found it more difficult to present this kind of growth.

One of the most common themes Brighteye sees in young companies is an emphasis on international expansion for growth. To get some additional insight into this trend, we surveyed edtech firms on their expansion plans, priorities and pitfalls. We received 57 responses and supplemented it with interviews of leading companies and investors. Europe is home 49 of the surveyed companies, six are based in the U.S., and three in Asia.

The survey revealed a roughly even split of target customers across companies, institutions and consumers, as well as a good spread of home markets. The largest contingents were from the U.K. and France, with 13 and nine respondents respectively, followed by the U.S. with seven, Norway with five, and Spain, Finland, and Switzerland with four each. About 40% of these firms were yet to foray beyond their home country and the rest had gone international.

International expansion is an interesting and nuanced part of the growth path of an edtech firm. Unlike their neighbors in fintech, it’s assumed that edtech companies need to expand to a number of big markets in order to reach a scale that makes them attractive to VCs. This is less true than it was in early 2020, as digital education and work is now so commonplace that it’s possible to build a billion-dollar edtech in a single, larger European market.

But naturally, nearly every ambitious edtech founder realizes they need to expand overseas to grow at a pace that is attractive to investors. They have good reason to believe that, too: The complexities of selling to schools and universities, for example, are widely documented, so it might seem logical to take your chances and build market share internationally. It follows that some view expansion as a way of diversifying risk — e.g. we are growing nicely in market X, but what if the opportunity in Y is larger and our business begins to decline for some reason in market X?

International expansion sounds good, but what does it mean? We asked a number of organizations this question as part of the survey analysis. The responses were quite broad, and their breadth to an extent reflected their target customer groups and how those customers are reached. If the product is web-based and accessible anywhere, then it’s relatively easy for a company with a good product to reach customers in a large number of markets (50+). The firm can then build teams and wider infrastructure around that traction.

News: Tips for managing growth across iOS updates

• September 18, 2021
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“I’ve seen startups spend thousands of dollars inefficiently as a result of not having optimal signal in their paid acquisition campaigns. I’ve also spent millions at companies such as Postmates refining our signal to the best possible state,” says growth marketer Jonathan Martinez in a guest column for Extra Crunch this week. “I’d like every

“I’ve seen startups spend thousands of dollars inefficiently as a result of not having optimal signal in their paid acquisition campaigns. I’ve also spent millions at companies such as Postmates refining our signal to the best possible state,” says growth marketer Jonathan Martinez in a guest column for Extra Crunch this week. “I’d like every startup to avoid the painful mistake of not having this set up correctly, instead making the most of every important ad dollar.”

The TechCrunch team has been busy this past week, especially with Disrupt next week and the iOS 15 release date quickly approaching. If you haven’t already registered for Disrupt, it’s not too late to get a ticket. We’re excited for all of the sessions, including “The Subtle Challenges of Assessing Product-Market Fit” on Tuesday, September 21 from 2:05 PM – 2:45 PM EDT the Extra Crunch stage. The marketing world was full steam ahead this past week, Martinez covered how to optimize signal and Miranda Halpern spoke with Vivek Sharma, CEO of Movable Ink about the impact that iOS 15 will have on email marketers. We also had guest posts from Bryan Dsouza of Grammarly and Xiaoyun TU of Brightpearl. More details below.

Help TechCrunch find the best growth marketers for startups.

Provide a recommendation in this quick survey and we’ll share the results with everybody.

If you didn’t already hear, we’re giving away one free ticket to Disrupt, through the Experts survey. Check out the schedule for Disrupt, and read on to learn about the giveaway details:

• Have you already submitted a recommendation? That’s great — we’re counting all previous survey submissions as an entry for the Disrupt ticket.
• We’ll also enter the next 100 survey submissions into the giveaway.
• Do you want to submit 10 recommendations to increase your chance at winning? We love the enthusiasm, but we ask that you only submit one recommendation for each marketer that you’ve worked with.
• Don’t know what to say in your recommendation? Start with what traits they had, what they did to help your company, how their work affected your business and go from there!
• We manually go through all entries, so please don’t copy and paste the same response multiple times.
• Have a question about the giveaway? Send us an email at ec_editors@techcrunch.com.
• The survey will stay open, but we won’t be counting submissions as entries to this giveaway after Sunday, September 19, 11:59 pm PT.

Marketer: Andrew Race, Juice
Recommended by: Orin Singh, Merchant Industry
Testimonial: “We were referred to Juice by a family friend of my company’s owner and as a personal courtesy they said they were giving us their best guy. Naturally we thought that is what everyone says but they were not kidding. Andrew was singularly leagues above our previous marketing company. Having someone so knowledgeable and willing to learn a new industry proved to be the turning point for us.”

In growth marketing, signal determines success: Martinez learned from his mistakes, and share the lessons learned with us. From selecting the signal, to how to enhance it, Martinez covers key aspects including how to take advantage of iOS 14. He says, “So how do you stay ahead and continue moving the needle on your growth marketing campaigns? First and foremost, constantly question the events you’re optimizing for. And second, leave no stone unturned.”

Marketers should plan for more DIY metrics as iOS 15 nears: The release of iOS 15 will change that playing field for marketers. They’ll have to rely on metrics that use zero and first-party data rather than relying on email open rates as the main metric. Miranda spoke with Sharma about how this release will impact the industry and what marketers should focus on. One tip from Sharma is, “Focus on down funnel metrics like clicks and conversions — that’s what it really comes down to and that’s the truest indicator of engagement.”

(Extra Crunch) Demand Curve: How to get social proof that grows your startup: Nick Costelloe, head of content at Demand Curve, dives into social proof and how startups can use it to their advantage. On social proof, Costelloe says, “Have you ever stopped to check out a restaurant because it had a large lineup out front? That wasn’t by chance. It’s common for restaurants to limit the size of their reception area. This forces people to wait outside, and the line signals to people walking past that the restaurant is so good it’s worth waiting for.”

(Extra Crunch) 5 things you need to win your first customer: Dsouza, product marketing lead at Grammarly, walks us through how to win your first customer. He includes explanations, how-tos, and practice use cases. Dsouza says,” . . .ask any founder what really proves their startup has taken off, and they will almost instantly say it’s when they win their first customer.”

(Extra Crunch) 4 ways to leverage ROAS to triple lead generation: TU, global director of demand generation at Brightpearl, walks us through ways to use return on advertising spending (ROAS). She says, “When you choose a return metric, you need to make sure it matches your company goal without taking ages to get the data.”

Tell us who your favorite startup growth marketing expert to work with is by filling out our survey.

News: Daily Crunch: Apple, Google bow to Russian pressure

• September 17, 2021
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Hello and welcome to Daily Crunch for Friday, September 17th! What a week, ya’ll. It is now just days before Disrupt, which means the TechCrunch hive is buzzing. I’ll leave it by noting that Reid Hoffman is coming, which is going to be a treat.

Hello and welcome to Daily Crunch for Friday, September 17th! What a week, ya’ll. It is now just days before Disrupt, which means the TechCrunch hive is buzzing. I’ll leave it by noting that Reid Hoffman is coming, which is going to be a treat. See you next week! — Alex

The TechCrunch Top 3

• Profits > Ethics: Apple and Google have removed a “tactical voting app created by the organization of jailed Kremlin critic Alexei Navalny” from their marketplaces, we reported. TechCrunch notes that “the Russian state [is] amping up the pressure on foreign tech giants ahead of federal elections.” So much for standing up for democracy, or whatever.
• Are software valuations stabilizing? After a simply incredible run, the value of software revenues may have reached a plateau. A very high plateau, mind, but still a resting point. This is not bad news for SaaS companies, which are still valued at historically elevated levels.
• Apple “actively monitoring” legal challenges to Texas abortion law: While some tech companies are making their displeasure at the new Texas reproductive care bill very public, Apple is taking a slightly slower, lower-profile approach to the matter. But it’s still good to see an American tech company nearly take a stand on a moral matter. It’s better than whatever is actually less than that. A little.

Startups/VC

• Journey raises $3M for psychedelic therapy: There’s growing market sentiment that some drugs generally associated with recreational activities could have positive impacts for various mental conditions. Journey wants to explore Ketamine-based treatments for anxiety and depression.
• Aurora Propulsion raises €1.7M for satellite propulsion: How do you make a satellite move a little bit and then stop? It’s not an idle question given how many flying objects there are in orbit today. And with more expected to take flight this year than ever, Aurora wants to help our satellites scoot around and avoid one another.
• Aircover raises $3M more for its sales intelligence tool: Integrating with Zoom to provide real-time insights to sales folks during their calls, Aircover is part of a larger trend of sales tech startups building services for the myriad sales people in the market. Defy Partners led the round, which also saw participation from Firebolt Ventures and others.
• Unicorns are taking so long to go public that their former executives are becoming VCs before they reach liquidity: That’s our key takeaway from the news that Instacart’s chief financial officer Sagar Sanghvi has left the on-demand grocery for Accel.

4 ways to leverage ROAS to triple lead generation

In school, it’s highly unethical to copy someone else’s work and pass it off as your own. In business, however, it’s encouraged.

Xiaoyun TU, global director of demand generation at Brightpearl, wrote a comprehensive guide that describes how a better understanding of return on advertising spend (ROAS) can triple your company’s lead generation.

“A ‘good’ ROAS score is different for each company and campaign,” she says.

“If your figure isn’t where you’d like it to be, you can leverage ROAS data to create targeted campaigns and personalized experiences.”

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Big Tech Inc.

• Elon praises Chinese automakers: As Beijing looks to consolidate its national EV industry, Tesla’s CEO took to a scripted set of comments to praise his Chinese rivals. If you want to understand how different the business climate is between China and America, contrast the mercurial executive’s message to China, and then read his tweets.
• Here’s a headline for you: “Facebook knows Instagram harms teens. Now, its plan to open the app to kids looks worse than ever.” Preach, Taylor. If you are not caught up on the Facebook beat, read the Wall Street Journal’s latest series of articles. They are more than revelatory.

TechCrunch Experts: Growth Marketing

Image Credits: SEAN GLADWELL (opens in a new window) / Getty Images

With the release of iOS 15 around the corner, we spoke to Movable Ink CEO Vivek Sharma and got his take on what marketers can do to prepare, “Marketers should plan for more DIY metrics as iOS 15 nears.”

TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this survey along to your clients; we’d like to hear about why they loved working with you.

News: Longtime VC, and happy Miami resident, David Blumberg has a new $225 million fund

• September 17, 2021
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Blumberg Capital, founded in 1991 by investor David Blumberg, has just closed its fifth early-stage venture fund with $225 million, a vehicle that Blumberg says was oversubscribed — he planned to raise $200 million — and that has already been used to invest in 16 startups around the world (the firm has small offices in

Blumberg Capital, founded in 1991 by investor David Blumberg, has just closed its fifth early-stage venture fund with $225 million, a vehicle that Blumberg says was oversubscribed — he planned to raise $200 million — and that has already been used to invest in 16 startups around the world (the firm has small offices in San Francisco, New York, Tel Aviv, and Miami, where Blumberg moved his family last year).

We caught up with him earlier this week to talk shop and he sounded almost ecstatic about the current market, which has evidently been good for returns, with Blumberg Capital’s biggest hits tied to Nutanix (it claims a 68x return), DoubleVerify (a 98x return at IPO in April, the firm says), Katapult (which went public via SPAC in July), Addepar (currently valued above $2 billion) and Braze (it submitted its S-1 in June).

We also talked a bit about his new life in Florida, which he was quick to note is “not a clone of Silicon Valley,” in case we had that idea. Not last, he told us why he thinks we’re in a “golden era of applying intelligence to every business,” from mining to the business of athletic performance.

More from our conversation, edited lightly for length and clarity, follows:

TC: What are you funding right now?

DB: Our last 30 to 40 deals have basically been about big data that’s been analyzed by artificial intelligence of some sort, then riding in a better wrapper of software process automation on rails of internet and mobility. Okay, that’s a lot of buzzwords.

TC: Yes.

DB: What I’m saying is that this ability to take raw information data that’s either been sitting around and not analyzed, or from new sources of data like sensors or social media or many other places, then analyze it and take it to all these businesses that have been there forever, is beginning to [have] incremental [impacts] that may sound small [but add up].

One of our [unannounced] companies applies AI to mining — lithium mining and gold and copper — so miners don’t waste their time before finding the richest vein of deposit. We partner with mining owners and we bring extra data that they don’t have access to — some is proprietary, some is public — and because we’re experts at the AI modeling of it, we can apply it to their geography and geology, and as part of the business model, we take part of the mine in return.

TC: So your fund now owns not just equity but part of a mine?

DB: This is evidently done a lot in what’s called E&P, exploration and production in the oil and gas industry, and we’re just following a time-tested model, where some of the service providers put in value and take out a share. So as we see it, it aligns our interests and the better we do for them, the better they do.

TC: This fund is around the same size of your fourth fund, which closed with $207 million, seemingly by design. How do you think about check sizes in this market?

DB: We write checks of $1 million to $6 million generally. We could go down a little bit for something in a seed where we can’t get more of a slice, but we like to have large ownership up front. We found that to have a fund return at least three x — and our funds seem to be returning much more than that — [we need to be math-minded about things].

We have 36 companies in our portfolio typically, and 20% of them fail, 20% of them are our superstars, and 60% are kind of medium. Of those superstars, six of them have to return $100 million each in a $200 million fund to make it a $600 million return, and to get six companies to [produce a] $100 million [for us] they have to reach a billion dollars in value, where we own 10% at the end.

TC You’re buying 10% and maintaining your pro rata or this is after being diluted over numerous rounds?

DB: It’s more like we want 15% to 20% of a company and it gets [diluted] down to 10%. And it’s been working. Some of our funds are way above that number.

TC: Are all four of your earlier funds in the black?

DB: Yes. I love to say this: We have never, ever lost money for our fund investors.

TC: You were among a handful of VCs who were cited quite a lot last year for hightailing it out of the Bay Area for Miami. One year into the move, how is it going?

DB: It is not a clone of Silicon Valley. They are different and add value each in their own way. But Florida is a great place for our family to be and I find for our business, it’s going to be great as well. I can be on the phone to Israel and New York without any time zone-related problems. Some of our companies are moving here, including one from from Israel recently, one from San Francisco, and one from Texas. A lot of our LPs are moving here or live here already. We can also up and down to South America for distribution deals more easily.

If we need to get to California or New York, airplanes still work, too, so it hasn’t been a negative at all. I’m going to a JPMorgan event tonight for a bunch of tech founders where there should be 150 people.

TC: That sounds great, though did you feel about summer in Miami?

DB: We were in France.

Pictured above, from left to right: Firm founder David Blumberg, managing director Yodfat Harel Buchris, COO Steve Gillan, and managing director Bruce Taragin.

News: Inside GitLab’s IPO filing

• September 17, 2021
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While the technology and business world worked towards the weekend, DevOps firm GitLab filed to go public. So we need to pause, digest the company’s S-1 filing, and come to some early conclusions.

While the technology and business world worked towards the weekend, developer operations (DevOps) firm GitLab filed to go public. Before we get into our time off, we need to pause, digest the company’s S-1 filing, and come to some early conclusions.

GitLab competes with GitHub, which Microsoft purchased for $7.5 billion back in 2018.

The company is notable for its long-held, remote-first stance, and for being more public with its metrics than most unicorns — for some time, GitLab had a November 18, 2020 IPO target in its public plans, to pick an example. We also knew when it crossed the $100 million recurring revenue threshold.

The company’s IPO has therefore been long expected. In its last primary transaction, GitLab raised $286 million at a post-money valuation of $2.75 billion, per Pitchbook data. The same information source also notes that GitLab executed a secondary transaction earlier this year worth $195 million, which gave the company a $6 billion valuation.

Let’s parse GitLab’s growth rate, its final pre-IPO scale, its SaaS metrics, and then ask if we think it can surpass its most recent private-market price. Sound good? Let’s rock.

The GitLab S-1

GitLab intends to list on the Nasdaq under the symbol “GTLB.” Its IPO filing lists a placeholder $100 million raise estimate, though that figure will change when the company sets an initial price range for its shares. Its fiscal year ends January 31, meaning that its quarters are offset from traditional calendar periods by a single month.

Let’s start with the big numbers.

In its fiscal year ended January 2020, GitLab posted revenues of $81.2 million, gross profit of $71.9 million, an operating loss of $128.4 million, and a modestly greater net loss of $130.7 million.

And in the year ended January 31, 2021, GitLab’s revenue rose roughly 87% to $152.2 million from a year earlier. The company’s gross profit rose around 86% to $133.7 million, and operating loss widened nearly 67% to $213.9 million. Its net loss totaled $192.2 million.

This paints a picture of a SaaS company growing quickly at scale, with essentially flat gross margins (88%). Growth has not been inexpensive either — GitLab spent more on sales and marketing than it generated in gross profit in the past two fiscal years.

News: Cameo launches Cameo Calls, a service for fans to video chat with celebs

• September 17, 2021
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If you really want to video chat tonight with William Hung of retro American Idol fame… got twenty bucks to spare? Yesterday, Cameo launched its Cameo Calls products, which lets fans video chat for up to 15 minutes one-on-one with their favorite influencers and celebrities. The talent sets the duration, time, and price of their

If you really want to video chat tonight with William Hung of retro American Idol fame… got twenty bucks to spare? Yesterday, Cameo launched its Cameo Calls products, which lets fans video chat for up to 15 minutes one-on-one with their favorite influencers and celebrities. The talent sets the duration, time, and price of their call, which Cameo says averages around $31.

To book a call, users can go to Cameo’s website or app to see a schedule of upcoming Cameo Calls that they can buy. These also appear on individual talent’s Cameo pages. When you purchase a Cameo Call, you get a unique ticket code that you enter on the app to join your call.

In June 2020, Cameo enabled users to book Zoom calls with celebrities as lockdown became a global norm, but Cameo phased out that feature in April. Instead, Cameo Calls now offers a native experience in the app, rather than relying on third-party software. The downside for consumers, though, is that this makes it more difficult to invite your favorite reality star to your office’s Zoom happy hour. But on the bright side, the Cameo Calls includes a dedicated photo opp at the end of the call, so you can get your celebrity selfie without dealing with the awkwardness of asking to take a photo.

Experiences like Cameo Calls make sense in light of the COVID-19 pandemic, when celebrity meet-and-greets might not be safe in many places. But Cameo also thinks this product can stand in for a typical meet and greet even in “normal” times. Often, celebrity meet-and-greets require waiting in a long line to only have 5 or 10 seconds of time with the talent. Even though many Cameo Calls sessions are only a few minutes long, you might be able to get a more personal experience than if you were the 100th fan in a long line in person.

“We foresee Cameo Calls replacing meet and greets at music festivals and world tours, fan conventions, sporting events, and more,” said Cameo Co-founder & CEO Steven Galanis.

Cameo says it tested this product with over 3,000 calls — during testing, talent-hosted themed meet-and-greets, coffee chats, private concerts, and tarot card readings. Some performers who tested the feature include James and Oliver Phelps, who played the Weasley twins in the Harry Potter movies, and David Henrie, a former Disney Channel star.

News: Zoom looks beyond video conferencing as triple-digit 2020 growth begins to slow

• September 17, 2021
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The company has been undertaking plans over last couple of years to move beyond its core video conferencing market — here’s how industry experts see this plan working.

It’s been a heady 12-18 months for Zoom, the decade-old company that experienced monster 2020 growth and more recently, a mega acquisition with the $14.7 billion Five9 deal in July. That addition is part of a broader strategy the company has been undertaking the last couple of years to move beyond its core video conferencing market into adjacencies like phone, meeting management and messaging, among other things. Here’s a closer look at how the plan is unfolding.

As the pandemic took hold in March 2020, everyone from businesses to schools to doctors and and places of worship moved online. As they did, Zoom video conferencing became central to this cultural shift and the revenue began pouring in, ushering in a period of sustained triple-digit growth for the company that only recently abated.