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Maybe it's a stock market bubble, or at least a tech stock bubble. And maybe DoorDash, Airbnb and C3.ai and their bankers should have gotten higher prices to take advantage of all the buzz. It's hard to avoid such reactions after, for example, DoorDash doubled its final private stock price for its public debut on Wednesday to $ 102 – only to see it climb to $ 175 by the end of the week.
Or maybe none of that matters because the future is much bigger and companies will get there anyway. Saar Gur Connie Loizos tells this week about DoorDash, in which he invested many years ago:
I started my career at Lehman Brothers in the investment banking team. After seeing the IPO process I can (frustrating that a company left some money on the table due to pricing), the tactical challenge (is that) it is very difficult to predict. You know what the market will carry when it turns to retail investors.
What excites me is that DoorDash is raising money because they are just starting out. I think this could be a company worth over $ 500 billion. There is so much to look forward to. As for the fundraising event, I think it is difficult for bankers to know where it will end up in the broader market so I am not as negative as maybe some others.
Here's the in-depth coverage of the craziest tech IPO week in the craziest year in decades, and picked up where I left off last Friday:
DoorDash strengthens its IPO reach ahead of the blockbuster IPO (EC)
The IPO market looks hot as Airbnb and C3.ai raise price targets (EC).
The Amazon wants to be a wish for the rest of us; will retail investors buy it?
DoorDash is said to be priced at $ 102 per share, doubling its final private price
Airbnb is said to cost between $ 67 and $ 68 to go public
While several market unicorns prepare IPOs, a VC intervenes in the data (EC).
DoorDash, C3.ai explodes on public market debuts
How DoorDash and C3.ai can defend their brand new IPO ratings (EC)
Airbnb's Pop on Day One Closes a Standout Week for Tech IPOs (EC)
Cloud Profits and Ratings (EC) Warming Up in Public and Private Markets
Meet Natasha Mascarenhas, your future author of the weekly startup newsletter
The year is drawing near to my time to write this newsletter too. I'll be going back to my regular job full time, doing Extra Crunch and other things in the back offices here at TechCrunch's virtual headquarters. My colleague Natasha Mascarenhas will take over from next week.
You are in good hands. In fact, you may have noticed many of their articles and weekly equity posts that come up here. Since joining us from Crunchbase News earlier this year, she has been reporting on early stage startups and the tech scene in San Francisco in general, with an emphasis on edtech. We have a lot more planned for Equity, Extra Crunch, and more, and she'll be able to tie everything together related to her daily reporting. Stay tuned for an action-packed 2021 (and follow her on Twitter in the meantime).
How to boot over $ 200 million in revenue
Alex Wilhelm hears from a startup founder who has taken an alternative approach to building a SaaS company. Here's more:
Now (north of $ 200 million in sales), (Nextiva) is a quiet giant and, in particular, hasn't drawn on venture capital funding on its way to scale. In an interview with the CEO and co-founder Tomas Gorny, I was allowed to dig a little under the skin of the company's history. It goes something like this: After moving to California in 1996 at the age of 20, Gorny finally started a web hosting company in 2001 after working for tech companies during the dot-com boom. The web hosting company sold to another company called Endurance International in 2007, which was sold as a combined company for around $ 1 billion in 2011 and later went public before being privatized for $ 3 billion last month from the Endurance mentioned Year 2010 for part of the historic record.
Gorny founded Nextiva in 2008 and focused on what it now calls "UcaaS" or Unified Communications as a service. The startup grew to around $ 40 million in annual recurring income (ARR). At that point, it ran into issues with a third-party system that would integrate hardware and support and service software, which caused its thinking to change. The company set out to build a platform.
Nextiva expanded horizontally, adding CRM software, analytics, and other capabilities to its broader suite as it scaled. And it grew efficiently; Based on the founding team's money, Gorny told TechCrunch that even if he had used someone else's money, he would have built the company the same way.
Why does TechCrunch cover so many early-stage funding rounds in the first place?
Here's Natasha's take, from a little explainer we made this week after some Twitter conversations:
The reason I love writing about tech, and doing the sometimes formulaic story of the funding round, is because I meet people who are crazy enough to put their entire legacy on one idea on the napkin stage. That's the story, the surprise, and the suspense. The dollar sign is only the first way.
I agree that I have collected donations that have been covered in TechCrunch and written many articles about funding rounds over the year. The round of funding is often the only way to prove you have traction in trying to get more exposure.
The Klarna founding story
Swedish fintech decacorn Klarna has opened up new avenues for users to shop online without credit cards over the decade and is now battling rivals big and small around the world. How did it all happen? Steve O’Hear sits down with founder Sebastian Siemiatkowski for an exclusive in-depth interview that Extra Crunch subscribers ate up this week. Here is his description:
In a far-reaching interview, Siemiatkowski directly faced criticism, including the fact that Klarna makes it too easy to get into debt and that buy now, pay later must be regulated. We also discuss Klarna's business model and the balancing act required to attract consumers and keep retailers informed.
We also learn how, under his watch and as the company began to scale, Klarna missed the next big opportunity in fintech and was instead usurped by Adyen and Stripe. Siemiatkowski also shares what's next for the company as it ventures further into the world of retail banking after acquiring a banking license in 2017.
Here is a painfully fascinating excerpt from Siemiatkowski:
One of the downsides we had at the company was that none of the three co-founders had a technical background. We couldn't code. We were connected to five engineers who were amazing engineers on their own, but we had a slight misunderstanding. Their idea was that they would come in, build a prototype, ship it out, and then go for 37% of the equity. Our understanding was that they would come in and ship it, and when it started to scale they would stay with us and work for an extended period of time. This is the classic mistake you make as a startup.
These Facebook antitrust lawsuits
It seems that the US government has finally had enough of Facebook's aggressive expansion and acquisition practices. After years of regulating light, the Federal Trade Commission and 49 separately attorneys general are suing the social media company's liquidation. You can find plenty of comments on the details on TechCrunch and elsewhere.
But here's my take to remember as you continue the headlines about it into next year: Facebook was always ready. I covered the company closely in the early years, and even then it was about being the operating system for the Internet, like Microsoft Windows for the desktop. The implicit and whispered goal was to get as big as possible before the regulations inevitably kicked in, like Microsoft did. With Facebook in a leading market position, we have a huge army of lawyers who have been preparing for years. Without delving further into the lawsuits or the political landscape in which it all happens … I don't expect a separation. But maybe new restrictions on acquisitions or something could limit the growth potential? The great successes of the decade were acquisitions.
One boring scenario that I haven't talked about much is simply that his products remain the phone book of the era for much of the world. Something regulated one way or another in various jurisdictions and banned outright in some – and still very big and successful.
All about TechCrunch
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In the course of the week
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Mixtape podcast: making technology accessible to everyone
Macron promotes the European tech ecosystem in an interview with Zennström
Equity Monday: Airbnb Awards, Sequoia Makes Money, and Early Stage Rounds
What to Expect in Fundraising in 2021
3 ways the pandemic is changing tech spending
Why Sapphire's Jai Das Believes Salesforce Slack Deal Could Be Successful
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Will 2020 bring more edtech rounds than ever or does it just feel like that?
Hello and welcome back to Equity, TechCrunch's venture capital-focused podcast (now on Twitter!) Where we unpack the numbers behind the headlines.
What a week yeah Instead of the news cycle slowing down as the year ends, things are still as hot as ever. We have large and small financing rounds, IPOs, extravaganzas on the first day and much more.
Luckily we had the whole crew with us – Chris and Danny and Natasha and me. Here is the overview:
And that's that! If you are not tired, were you even paying attention?
Equity declines every Monday at 7:00 a.m. PST and as quickly as possible on Thursday afternoon. So subscribe to us on Apple Podcasts, Overcast, Spotify and all casts.