Can you IPO sneakers? Also, this is the last Exchange roundup of the year – .
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Ready? Let’s talk about money, startups and hot IPO rumors.
Sweet dreams consist of IPOs, so Merry Christmas
We are all very tired, but there is still so much news that I am sorry
Can you IPO sneakers? This is also the last Exchange round-up for the year
Hello everyone, I hope you are fine. This is the last Exchange newsletter of 2020. There will be a handful of columns next week before I take some time off. Equity will continue to post episodes through the end of this cursed year too.
And now that we are done with housekeeping, our two main focuses for the week are: who is going public and how fast is a certain cohort of startups growing.
Sure, the two topics aren’t incredibly related topics, but I’m not going to let endless IPO news ruin what I wanted to talk about. So SEC broccoli first and then we have fun.
The IPO news has been very busy this week. Coinbase and UIPath filed privately, Poshmark publicly, and Bumble allegedly privately. In short, we’ve added four names to our IPO appeal, including Affirm and Roblox, which have delayed their own offers.
And with names like Chime, Robinhood, Expensify, and others already big enough to go public at will, the brand’s IPO crop of 2021 could rival what we’ve seen this year.
Thanks to the unicorns eager to graze public pastures and public markets near all-time highs, it will appear to be raining in the coming months. This means that the DPI and TVPI metrics for all venture capital will increase, making the entire asset class even more attractive than in today’s return-hungry world.
The music goes on.
How big is the software business?
Earlier this week, . reported on the new round of Ramp. The ramp started in February and was dismissed by some as a Brex clone. Ramp and Brex are competing with Divvy and other startups (more on two others) to help other companies manage their spending through a combination of real and virtual cards and software.
Along with some new software features, Ramp announced growth metrics as part of its news package. When Divvy was reached for similar numbers, the company supplied them. Brex declined to share results, which was fine. And I didn’t mention a few competing companies, namely Airbase and Plate IQ.
I should have included Airbase when I covered it in March 2020 when it grossed $ 23.5 million in a Series A expansion (the new capital was taken on a triple valuation so you can honestly call it a series B could denote). Regardless, Airbase is important not only because it is a competitor to Ramp and Divvy and Brex, but also because it offers similar products to its competitors, but it also charges fees for its software.
This is in contrast to Divvy, Brex, and Ramp, as far as I can tell, companies that are more focused on attracting large numbers of businesses and generating revenue from the switching income. (If no fees are charged for software that is wrapped around merchandise cards, the sales friction can be low and thus theoretically customer growth can be kept high.)
But while Airbase wants corporate customers to pay for its software, it’s still growing like the hell. According to an email from Airbase CEO Thejo Kote, the startup’s Annual Recurring Revenue (ARR) has increased 2.5x this year, and payment volume has “increased 7x” on a yearly basis.
Those are super good numbers. Well-known investor Garry Tan added another company to the mix and said on Twitter that Plate IQ, a company I have not yet met, “has over $ 500 million in annual transactions and is profitable (real profit)” . In contrast, the relatively young Ramp just announced that it has released a total of $ 100 million in managed spending.
My takeaway from this flurry of reports is not that any single company will win or that one company is the clear leader. Instead, browsing a single software niche that week reminded me how big the software market is.
How can all these competing startups grow so fast at the same time? The answer is that the world economy is huge, and software is still happily creeping in on it, gaining in weight. I bet we have three of our five companies in this play that survive on a public scale and only two that are picked up by private rivals or public giants.
I suppose that makes me cloud long. Whatever. Just don’t tell VC Twitter.
This week I’ve split the rest of the things you need to know into two groups to make things easier. The first is everything that wasn’t a round. The second is all rounds. Let’s go:
- Slack’s venture capital fund is back, the parent company is self-funding the project, and the capital pool has doubled to $ 50 million.
- StockX has hit the IPO scale. . reported on its fundraiser this week, writing at the time that the used clothing marketplace was an IPO candidate. So we took a look. Yes. It is an IPO candidate.
- The information reported this week that SoFi had revenue of approximately $ 200 million in the third quarter and posted an EBITDA positive result.
- Axios reported on the growth of the creative economy. Stop rolling your eyes. It’s more than big enough to be taken seriously, so get on with it. We also talked about the situation at Equity if you like podcasts with jokes.
- Crypto is back in the headlines and the recent price gains in the asset category are not based on sheer hype.
- Robinhood had a rough week. The company’s shot at an IPO if it wants one is unlikely to be besieged – it wouldn’t be the only company to go public with some legal affairs in the past few quarters – but it wasn’t the week of the stock trading company was doing business wanted. And its rival Public.com raised just as much money as Robinhood had to pay in fines. Ouch.
- The startup ratings are at least in Silicon Valley on the other side of the COVID depression.
Now a rush of megarounds.
Huge and important
Our Various & Sundry section this week is anything but. So I renamed it for this last newsletter of the year. Here they are, the rounds are both huge and important:
- The Brazilian Creditas raised $ 255 million. . placed the round among a larger wave of fintech rounds focused on Latin America.
- Zenoti of Bellevue, near Microsoft, raised $ 160 million, a round that made it a unicorn. What is it doing According to the Seattle Times, “cloud computing software is being made to manage spas and salons.” Do not laugh. Vertical SaaS is huge. Barbershop-focused vertical SaaS player Squire was valued at $ 250 million last week.
- GoCardless adds another payment-driven round to the newsletter and is almost a unicorn after more money has been raised this week.
- According to Tech.EU, French Lydia Lydia, who wants to be “an all-in-one platform for all the financial needs” of younger consumers, added $ 86 million to its Series B this week. (Accel spearheaded this round and the latest from Public. Great week for this company.)
- . reported that ClickUp has put together a new $ 100 million round that values the company at $ 1 billion. $ 35 million was raised in June. Why are we interested in ClickUp? It’s part of a wave of companies that closed two rounds in 2020. Ramp. Welcome. SkyFlow. The list goes on.
- In the Insurtech world, Bestow raised $ 70 million for its digital life insurance product. Insurtech has been hot lately, and AgentSync, a player in space, has won two rounds this year alone.
- Finally, Paxos, who works for PayPal among other things, collected 142 million US dollars in a mammoth series C. Chalk it up to the crypto boom.
And now I’m going to disappear into a cloud of JUUL fog to lose more games of Civ 6 against my archenemy, hugs and all the best.