Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading.
Ready? Let’s talk money, startups and spicy IPO rumors.
The startup world could be in for a busy summer.
Today the economy is improving. Unemployment is falling, while interest rates are staying low. There’s lots of new capital on offer, and some expectation that we’ll get back to Q1’s IPO wave in Q3. Throw in widespread vaccinations and a return to something akin to our old lives, and the world of business could be ready to accelerate further in short order.
Tiger Global just closed one of the biggest venture funds ever, with $6.7 billion
There are caveats, of course. Lots of folks are being left behind in the recovery. And vaccine hesitancy is as lethally stupid as it is surprisingly common. But anticipated summer economic conditions, strong markets and a general belief that the digital transformation’s acceleration will continue point to a coming hot(ter) period for tech.
That is good news for startups.
We’re already starting to see anticipatory reporting on the matter. Wired’s recent piece on venture capitalists telling startups to invest rapidly is worth reading. I’ll back it up by saying that it seems that most startups that I am chatting with every week had a solid-as-heck first quarter and aren’t worried about the second. If I am not accidentally speaking with only founders who are doing well and somehow missing legion startups that are struggling, it seems to be a pretty darn good time to build a tech company.
Plaid’s round from earlier this week underscores what I’m talking about. The API-powered consumer fintech company’s CEO Zach Perret told TechCrunch how much the digitization of the world of financial services had accelerated in the last year. Yep. Startups that would have done well in more normal times are often seeing their market move in their direction. Often rapidly. That’s why Plaid is worth north of $13 billion today, nearly triple what it was worth in early 2020.
For the startups doing well, there’s ample cash on offer. Ramp’s latest round, a two-in-one, makes that point plain. So, if the broader economy and its technological sector do accelerate, expect wallets to open even further. As the temperature heats up, so too could the business climate.
I mean, how else can you explain the Clubhouse news? Or the Topps news? TechCrunch had to cover the middle ground between baseball cards, NFTs and candy, for the love of all that is holy.
Next week The Exchange is digging into Q1 2021 venture capital numbers from around the world. We’ll see soon enough how big the start to the year was, but we have a guess.
Kudo, Coinbase and Canva
Sticking to our theme of growth and a hot and warming climate for tech startups, a few more data points from the last week.
I caught up with the CEO of Kudo this week, a few days after his company announced a $21 million Series A round of funding. I covered the translation-as-a-service company last year when it raised a seed round. Per its chief executive Fardad Zabetian, the company had 14 employees last March. It now has 150 and has more than 50 open positions. That’s not the sort of growth you see off of merely a few capital raises. That’s growth.
Coinbase’s monster quarter highlights how some technology work from the past decade is maturing in a lucrative manner. The company’s epic revenue growth and nearly hilarious profitability are going to make its impending direct listing an even bigger event than I had expected. Get ready for that on the 14th. (More from the original Coinbase listing here.)
And then there’s Canva, which just repriced itself through a $71 million secondary transaction. The cloud design company is now worth $15 billion, up from around $6 billion last June, per Crunchbase data. Even more, the company announced a few growth metrics worth sharing:
- That Canva has crossed the $500 million annualized revenue mark
- That Canva grew 130% in the last year, and was profitable (though we don’t know of what sort)
- That Canva now has 55 million monthly active users
And it’s not going public. Yes, you can laugh. I got the company to ask its CEO Melanie Perkins why that’s the case, and here’s what we got back:
There’s no rush for us. We’re profitable and we’re very fortunate that we can still find investors that align to our vision and values. I often say that we’re just one percent of the way there with Canva. We have a huge vision to empower every team to achieve its goals through visual communication. We’ve still got a whole lot more to achieve and so no immediate plans for any public listing- there’s simply no rush for us right now.
Let me just say that you don’t only have to go public when there’s a rush to do so! You can do so merely to make us, the reporting class, excited about going to work, as there are new numbers to read!
Various and sundry
I was off for a bit of this week to recharge, so some news and notes you might have expected in the above missive may be missing. Rest assured that The Exchange is going to get bigger and better and more number-y and full of jokes when I get back. Someone is joining the little team, so we have big plans.
Hugs,
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