Equity transcribed: Silicon Valley’s founder fetish infantilizes public companies

Welcome back to this week’s transcribed edition of Equity.

This was a big week of news that the Equity duo had to cover. Kate was at the Code Conference, Fortnite maker, Epic Games bought Houseparty, and a bit more on the Bird-Scoot deal.

Then came talk of the CrowdStrike IPO, which gave way to a heated discussion about dual-class shares.

Alex Wilhelm: I think it’s honest. I think giving the public one vote per share, and giving yourself 10 so you retain greater than 50% of voting is a sop. I think it’s ridiculous. Just fly under your own flag. If you don’t want to share any control, then don’t. If you want to have a company with a functional governance, that adheres to historical norms for how this stuff works, then have votes. This 10 versus 1 thing is a fracking farce, because I can’t swear on this show, so you can fill that in yourself. If you want to look at a historical example of a company that didn’t have this setup, it was Amazon, which historically thinks far ahead, and has done fantastically well. It’s public company growing from a, I believe, under nine-figure revenue. The idea you can’t do it is trash. The idea that it always works is wrong. To me, it’s dishonest. If you’re going to sell shares, go public, and float, share the voting power with your shareholders. Don’t treat them like children, and you like a god. You’re not.

Kate Clark: Alex is getting really worked up, but I totally agree with you. That’s why I want to-

Wilhelm: I’m not worked up, I’m angry.

Clark: That’s why I wanted to talk about it though, because I think it’s important. I think what you just said is a perfect summary of why it’s messed up. The only thing I think that will really change this, is to see whether these dual-class stocks, versus single-class stocks, perform differently on the market. As far as I know, they’re not, which means that people don’t care. Or, people don’t know, I don’t know. If a company isn’t going to lose any money doing it … If they’re not going to have any consequences whatsoever, they’re not going to be up against any negative feedback from shareholders, then of course, they’re going to keep doing it. Like I said, it’s not really talked about very much.

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Startups Weekly: #CodeCon, the ‘techlash’ and ill-prepared CEOs

Hello and welcome back to Startups Weekly, a newsletter published every Saturday that dives into the week’s noteworthy venture capital deals, funds and trends. Before I dive into this week’s topic, let’s catch up a bit. Last week, I wrote about Peloton’s upcoming initial public offering. Before that, I noted the proliferation of billion-dollar companies. 

Remember, you can send me tips, suggestions and feedback to [email protected] or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here

Now I know this newsletter is supposed to be about startups, but we’re shifting our focus to Big Tech today. Bear with me.

I spent the better part of the week in Scottsdale, Ariz. where temperatures outside soared past 100 and temperatures inside were icy cold. Both because Recode + Vox cranked the AC to ungodly levels but also because every panel, it seemed, veered into a debate around the “techlash” and antitrust.

If you aren’t familiar, the Financial Times defines the techlash as “the growing public animosity toward large Silicon Valley platform technology companies.” Code Conference has in the past been an event that underscores innovation in tech. This year, amid growing tensions between tech’s business practices and the greater good, things felt a little different.

The conference began with Peter Kafka grilling YouTube’s CEO Susan Wojcicki. Unfortunately for her, CodeCon took place the week after an enormous controversy struck YouTube. You can read about that here. Wojcicki wasn’t up to the task of addressing the scandal, at least not honestly. She apologized to the LGBTQ community for YouTube’s actions but was unable to confront the larger issue at hand: YouTube has failed to take necessary action toward eliminating hate speech on its platform, much like other social media hubs.

From there, The Verge’s Casey Newton asked Instagram head Adam Mosseri and Facebook vice president of consumer hardware Andrew Bosworth point blank if Facebook should be broken up. Unsurprisingly, neither of the two men are fond of the idea.

“Personally, if we split [Facebook and Instagram] it might make my life easier but I think it’s a terrible idea,” Mosseri, who was named CEO of Instagram last fall, said. “If you split us up, it would just make it exponentially more difficult to keep people safe. There are more people working on safety and integrity issues at Facebook than all the people that work at Instagram.”

Bosworth, who manages VR projects at Facebook, had this to say: “You take Instagram and Facebook apart, you have the same attack surfaces. They now aren’t able to share and combine data … So this isn’t circular logic. This is an economy of scale.”

Wojcicki, when asked whether YouTube should separate from Google, had a less nuanced and frankly shockingly ill-prepared response:

There’s more where that came from, but this newsletter isn’t about big tech! It’s about startups! Here’s all the startup news you missed this week.

IPO Corner

CrowdStrike’s IPO went really well: After pricing its IPO at $34 per share Tuesday evening and raising $612 million in the process (a whole lot more than the planned $378 million), the company’s stock popped 90% Wednesday morning with an initial share price of $63.50. A bona fide success, CrowdStrike boasted an initial market cap of $11.4 billion, nearly four times that of its last private valuation, at market close Wednesday. I chatted with CrowdStrike CEO George Kurtz on listing day. You can read our full conversation here.

Fiverr climbs: The marketplace had a good first day on the NYSE. The company priced its IPO at $21 per share Wednesday night, raising around $111 million. It then started trading Thursday morning at $26 apiece, with shares climbing for most of the day and closing at $39.90 — up 90% from the IPO price. Again, not bad. Read TechCrunch’s Anthony Ha’s conversation with Fiverr CEO Micha Kaufman here.

Get ready for … Slack’s highly-anticipated direct listing next week (June 20). Catch up on direct listings here and learn more about Slack’s journey to the public markets here.

Bird confirmed its acquisition of Scoot

As is usually the case with these things, parties from both Bird and Scoot declined to tell us any details about the deal, so we went and found the details ourselves! First, The Wall Street Journal’s Katie Roof reported the (mostly stock) deal was valued at roughly $25 million. We confirmed with our sources that it was indeed less than $25 million and came after Scoot struggled to raise additional capital from venture capital investors.

Fortnite throws a Houseparty 

While we’re on the subject of M&A, Epic Games, the creator of Fortnite, acquired Houseparty, a video chatting mobile app, this week. The deal comes shortly after Epic Games raised a whopping $1.25 billion. Founded in 2015, Houseparty is a social network that delivers video chat across a number of different platforms, including iOS, Android and macOS. Like Fortnite, the offering tends to skew younger. Specifically, the app caters toward teen users, providing a more private and safer space than other, broader platforms.

Startup Capital

Symphony, a messaging app, gets $165M at a $1.4B valuation
BetterUp raises $103M to fast-track employee development
Neurobehavioral health company BlackThorn pulls in $76M from GV
Against Gravity, maker of the VR hit ‘Rec Room,’ nabs $24M
Simpo secures $4.5M seed round to help drive software adoption

~Extra Crunch~

If you’ve been unsure whether to sign up for TechCrunch’s awesome new subscription service, now is the time. Through next Friday, it’s only $2 a month for two months. Seems like a no-brainer. Sign up here. Here are some of my personal favorite EC pieces of the week:

Silicon Valley’s founder fetish infantilizes public companies

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I debate dual-class stock, discuss my takeaways from #CodeCon and review the biggest rounds of the week. You can subscribe to Equity here or wherever else you listen to podcasts.

VCs are failing diverse founders; Elizabeth Warren wants to step in

Elizabeth Warren, who earlier this year confirmed her intent to run for president in 2020, has an ambitious plan to advance entrepreneurs of color.

In a series of tweets published this morning, the Massachusetts senator proposed a $7 billion Small Business Equity Fund to provide grants to Black, Latinx, Native American and other minority entrepreneurs, if she’s elected president. The initiative will be covered by her “Ultra-Millionaire Tax,” a two-cent tax on every dollar of wealth above $50 million the presidential hopeful first outlined in January.

The fund would be managed by the Department of Economic Development, a new government entity to be constructed under the Warren administration. With a goal of creating and defending American jobs, the Department of Economic Development would replace the Commerce Department and “subsume other agencies like the Small Business Administration and the Patent and Trademark Office, and include research and development programs, worker training programs, and export and trade authorities like the Office of the U.S. Trade Representative,” Warren explained.

The Small Business Equity Fund will exclusively issue grant funding to entrepreneurs eligible to apply for the Small Business Administration’s existing 8(a) program and who have less than $100,000 in household wealth, aiming to provide capital to 100,000 new minority-owned businesses, creating 1.1 million new jobs.

Founders of color receive a disproportionate amount of venture capital funding. There’s insufficient data on the topic, but research from digitalundivided published last year suggests the median amount of funding raised by black women, for example, is $0. According to the same study, black women have raised just .0006% of all tech venture funding since 2009.

Startups founded by all-female teams, despite efforts to level the playing field for female entrepreneurs, raised just 2.2% of venture capital investment in 2018.

VCs are a majority white and male. Plus, they have a proven tendency to invest their capital into entrepreneurs who look like them or who resemble founders that were previously successful. In other words, VCs are continuously on the hunt for the next Mark Zuckerberg .

“Even if we fully close the startup capital gap, deep systemic issues will continue to tilt the playing field,” Warren wrote. “86% of venture capitalists are white, and studies show that investors are more likely to partner with entrepreneurs who look like them. This tilts the field against entrepreneurs of color. So I plan to address this disparity head on too. I will require states and cities administering my new Fund to work with diverse investment managers—putting $7 billion in the hands of minority-and women-owned managers.”

Warren this morning also announced plans to “direct” federal pension and retirement funds to recruit diverse investment managers and to require states and cities administering the Small Business Equity Fund to work with diverse investment managers. Finally, Warren, again, if elected, will triple the budget of the Minority Business Development Agency, which helps entrepreneurs of color access funding networks and business advice .

Warren, throughout her campaign for the presidency, has made a number of critiques of the tech industry.

In March, the senator announced her plan to break up big tech.

“Twenty-five years ago, Facebook, Google, and Amazon didn’t exist,” Warren wrote. “Now they are among the most valuable and well-known companies in the world. It’s a great story — but also one that highlights why the government must break up monopolies and promote competitive markets.”

Silicon Valley’s founder fetish infantilizes public companies

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week was a lot of fun. We had Kate and Alex in the studio with Chris running the show and reminding half the recording team about English words (immersive, as a spoiler).

This week had a lot to go over. First, Kate went to the Recode + Vox Code Conference in Scottsdale, Arizona where it was very, very hot. She tells us her key takeaways of the event (here’s another spoiler: techlash).

Next, we turned to acquisitions, namely that Fortnite (Epic Games) bought Houseparty (formerly Meerkat, remember that?). Fornite is a cultural sensation that has become just as much a social phenom as it is a gaming powerhouse. Bringing Houseparty’s multi-party and popular-with-the-youth video chat product under its umbrella makes some sense. That Houseparty’s usage growth had reportedly stalled, we’re sure, had nothing to do with the sale.

Moving on, we chatted briefly about the Bird-Scoot deal which we had touched on last week. (Kate wrote about it here and Alex here). Scoot, as it turns out, was having a not-so-easy time raising additional venture capital and sold to Bird for less than $25 million (way under its last valuation of $71 million). Ouch.

From there it was deal city (BetterUp! Tenderd! Others!) before we jumped into the CrowdStrike news. The firm’s IPO is hot (more here, and here), which led to questions about IPO pricing (again. Sorry, we can’t stop) and whether IPO pops are good or bad (yes, this again, too, but it’s worth discussing).

Two topics followed. The success of the Fiverr IPO (and what that means for growth-y IPOs), and the impending Chewy debut + dual-class shares as a concept.

We’ve touched on dual-class stock structures before, but we think there is a lot more to unpack here and unpack we did! Basically, we think Silicon Valley’s founder fetish, as the headline here suggests, infantilizes public companies. Listen to the whole episode to hear our full rant.

All that and we had a lot of fun. Alex is out for a few weeks, but Kate has a bunch of great things coming down the podcast pike. Chat with you all next week!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Lightspeed Venture Partners doubles its growth practice

Lightspeed Venture Partners, a firm behind the likes of BetterUp, Aurora, Goop and dozens of others, will allocate more capital to mature companies with the hiring of three new partners.

Adam Smith, Amy Wu and Arsham Memarzadeh join the Menlo Park-headquartered venture capital fund’s growth practice. The team is led by longtime partner Will Kohler and Brad Twohig, who joined LSVP in 2018 to amp up the firm’s late-stage efforts, leading a $1.25 billion investment in Epic Games only months after arriving from Insight Venture Partners.

“I think we will continue to add to the team as we see the market opportunity ahead of us, so we can better understand when and where to invest,” Twohig tells TechCrunch. “They are going out and helping us identify interesting new opportunities. We are really looking for outlier businesses. We aren’t trying to invest in any company. We want outlier founders, outlying companies with outlying performance.”

The new hires double the size of LSVP’s late-stage team and come shortly after the firm closed on $1.8 billion for two new funds. Last year, LSVP announced Lightspeed Venture Partners XII, a $750 million early-stage vehicle, and Lightspeed Venture Partners Select III, a $1.05 billion fund for late-stage follow-on fundings.

Lightspeed, historically an early-stage fund, has continued to move downstream as deal sizes swell across all stages. With fresh capital to deploy, LSVP is not only continuing to invest in existing portfolio companies but also backing companies for the first time as late as the Series E.

“We still think there are great opportunities to make investments with a strong return profile even at the late-stage,” Kohler tells TechCrunch, citing the buzzworthy financial technology business Carta as an example. “[Carta is] an exceptional company even at a growth-stage investment because it has so much potential to keep growing. We are convinced there will be venture-sized returns.”

In addition to Carta, which LSVP invested in at its Series E earlier this year, Lightspeed has made late-stage bets on the B2B sales platform Seismic, employee coaching service BetterUp, Indian hotel business Oyo and Indian B2B wholesale marketplace Udon.

“Some time ago it might not have made sense for us to do this,” Kohler said. “But as we followed the growth of our early-stage companies, we’ve realized the markets are getting bigger, the global demand is impacting the size these companies can get and we can invest at an entry point that’s later on and realize a great venture return.”

Kohler emphasized the firm’s global funds — Lightspeed operates venture funds in China and India — as helpful mechanisms for late-stage deal sourcing. He also noted the firm’s expansion into late-stage is a “natural extension of its original vision.”

Founded in 2000, Lightspeed’s four founding partners — Chris Schaepe, Barry Eggers, Ravi Mhatre and Peter Nieh — “understood the boring non-sexy elements of tech,” Kohler explained.

As for the newest additions, Wu joins from Discovery Inc., where she was chief financial officer and senior vice president of the company’s global digital division. She will be focused on scaling businesses within LSVP’s portfolio.

Smith, focused on high-growth enterprise and consumer investment opportunities, previously worked as a principal at Bain Capital Ventures and a lead operations manager at Uber. Finally, Memarzadeh, who will invest in product-driven software startups, spent the last five years at OpenView, a Boston-based venture firm.

Newly public CrowdStrike wants to become the Salesforce of cybersecurity

Like many good ideas, CrowdStrike, a seller of subscription-based software that protects companies from breaches, began as a few notes scribbled on a napkin in a hotel lobby.

The idea was to leverage new technology to create an endpoint protection platform powered by artificial intelligence that would blow incumbent solutions out of the water. McAfee, Palo Alto Networks and Symantec, long-time leaders in the space, had been too slow to embrace new technologies and companies were suffering, the CrowdStrike founding team surmised.

Co-founders George Kurtz and Dmitri Alperovitch, a pair of former McAfee executives, weren’t strangers to legacy cybersecurity tools. McAfee had for years been a dominant player in endpoint protection and antivirus. At least, until the emergence of cloud computing.

Since 2012, CrowdStrike’s Falcon Endpoint Protection platform has been pushing those incumbents into a new era of endpoint protection. By helping enterprises across the globe battle increasingly complex attack scenarios more efficiently, CrowdStrike, as well as other fast-growing cybersecurity upstarts, has redefined company security standards much like Salesforce redefined how companies communicate with customers.

“I think we had the foresight that [CrowdStrike] was going to be a foundational element for security,” CrowdStrike chief executive officer George Kurtz told TechCrunch this morning. The full conversation can be read further below.

CrowdStrike co-founder and CEO George Kurtz.

Here’s Mary Meeker’s 2019 internet trends report

The Internet Trends Report — everyone’s favorite slide deck — is back. Bond Capital founder and former Kleiner Perkins general partner Mary Meeker made her presentation on stage at Vox/Recode’s Code Conference in Scottsdale, Arizona on Tuesday.

Meeker first crafted a report of this kind, which highlights the most important statistics and technology trends on the internet, in 1995.

This morning, Meeker highlighted slowed growth in ecommerce sales, increased internet ad spending, data growth, as well as the rise of freemium subscription business models, telemedicine, photo-sharing, interactive gaming, the on-demand economy and more.

“If it feels like we’re all drinking from a data firehose, it’s because we are,” Meeker told the audience.

The “Queen of the internet” made references to Slack, Stripe, Spotify, Dropbox, Discord, Twitch, Zoom, Stitch Fix, Instagram, and Bond portfolio company Canva as she reviewed her slides.

It’s been a busy past year for the former Morgan Stanley analyst, who since releasing the 2018 internet trends report last May, exited Kleiner Perkins and raised more than $1 billion for her debut growth fund, Bond.

We’ll be back later with a full analysis of this year’s report. For now, here’s a look at all 333 slides. You can view the full internet trends report archive here.

Mary Meeker raises $1.25B for Bond, her debut growth fund

Equity transcribed: What happens to late-stage VC if the Vision Fund goes away?

Welcome back to the transcribed edition of the wildly popular TechCrunch podcast, Equity. This week Kate Clark and Alex Wilhelm convened in the new studio to discuss the biggest venture capital news of the week.

There was a lot of news to get to so they started with some quick hits about Thumbtack, Bird, Scoot, Mirror and Looker. Then they got down to business and went in-depth on SoftBank’s Vision Fund and whether the money has dried up.

And folks from Social Capital are back with a new firm called Tribe Capital that looks a lot like … Social Capital.

Kate: I think the TLDR here is, if the Vision Fund doesn’t raise a Vision Fund Two, we will feel changes in the market. I think we will see deal sizes come back to earth a little bit, and I think we may see at least not increasingly large valuations, because I think that people may, especially now that it’s been a couple of years, people may underestimate the force that is a Vision Fund. We don’t have the Vision Fund, you know that obvious force that dark cloud is gone.

Alex: You’ll feel the lack. Yes. Couple of quick notes about why this might be. It isn’t just that people like Kate and I think this way. I mean, there’s been structural problems with the Vision Fund. There’s been some discussions about opacity and how it operates. How its decisions are made, and I would throw in there, there’s probably some questions about the prices it has paid. Uber managed to claw back above it’s IPO price for a hot second, and is back under it today.

Kate: And didn’t last long.

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Startups Weekly: The Peloton IPO (bull vs. bear)

Hello and welcome back to Startups Weekly, a newsletter published every Saturday that dives into the week’s noteworthy venture capital deals, funds and trends. Before I dive into this week’s topic, let’s catch up a bit. Last week, I wrote about the proliferation of billion-dollar companies. Before that, I noted the uptick in beverage startup rounds. Remember, you can send me tips, suggestions and feedback to [email protected] or on Twitter @KateClarkTweets.

Now, time for some quick notes on Peloton’s confirmed initial public offering. The fitness unicorn, which sells a high-tech exercise bike and affiliated subscription to original fitness content, confidentially filed to go public earlier this week. Unfortunately, there’s no S-1 to pore through yet; all I can do for now is speculate a bit about Peloton’s long-term potential.

What I know: 

  • Peloton is profitable. Founder and chief executive John Foley said at one point that he expected 2018 revenues of $700 million, more than double 2017’s revenues of $400 million.
  • There is strong investor demand for Peloton stock. Javier Avolos, vice president at the secondary marketplace Forge, tells TechCrunch’s Darrell Etherington that “investor interest [in Peloton] has been consistently strong from both institutional and retail investors. Our view is that this is a result of perceived strong performance by the company, a clear path to a liquidity event, and historically low availability of supply in the market due to restrictions around selling or transferring shares in the secondary market.”
  • Peloton, despite initially struggling to raise venture capital, has accrued nearly $1 billion in funding to date. Most recently, it raised a $550 million Series F at a $4.25 billion valuation. It’s backed by Tiger Global Management, TCV, Kleiner Perkins and others.

 

A bullish perspective: Peloton, an early player in the fitness tech space, has garnered a cult following since its founding in 2012. There is something to be said about being an early-player in a burgeoning industry — tech-enabled personal fitness equipment, that is — and Peloton has certainly proven its bike to be genre-defining technology. Plus, Peloton is actually profitable and we all know that’s rare for a Silicon Valley company. (Peloton is actually New York-based but you get the idea.)

A bearish perspective: The market for fitness tech is heating up, largely as a result of Peloton’s own success. That means increased competition. Peloton has not proven itself to be a nimble business in the slightest. As Darrell noted in his piece, in its seven years of operation, “Peloton has put out exactly two pieces of hardware, and seems unlikely to ramp that pace. The cost of their equipment makes frequent upgrade cycles unlikely, and there’s a limited field in terms of other hardware types to even consider making. If hardware innovation is your measure for success, Peloton hasn’t really shown that it’s doing enough in this category to fend of legacy players or new entrants.”

TL;DR: Peloton, unlike any other company before it, sits evenly at the intersection of fitness, software, hardware and media. One wonders how Wall Street will value a company so varied. Will Peloton be yet another example of an over-valued venture-backed unicorn that flounders once public? Or will it mature in time to triumphantly navigate the uncertain public company waters? Let me know what you think. And If you want more Peloton deets, read Darrell’s full story: Weighing Peloton’s opportunity and risks ahead of IPO.

Anyways…

Public company corner

In addition to Peloton’s IPO announcement, CrowdStrike boosted its IPO expectations. Aside from those two updates, IPO land was pretty quiet this week. Let’s check in with some recently public businesses instead.

Uber: The ride-hailing giant has let go of two key managers: its chief operating officer and chief marketing officer. All of this comes just a few weeks after it went public. On the brightside, Uber traded above its IPO price for the first time this week. The bump didn’t last long but now that the investment banks behind its IPO are allowed to share their bullish perspective publicly, things may improve. Or not.

Zoom: The video communications business posted its first earnings report this week. As you might have guessed, things are looking great for Zoom. In short, it beat estimates with revenues of $122 million in the last quarter. That’s growth of 109% year-over-year. Not bad Zoom, not bad at all.

Must reads

We cover a lot of startup and big tech news here at TechCrunch. Sometimes, the really great features writers put a lot of time and energy into fall between the cracks. With that said, I just want to take a moment this week to highlight a few of the great stories published on our site recently:

A peek inside Sequoia Capital’s low-flying, wide-reaching scout program by Connie Loizos

On the road to self-driving trucks, Starsky Robotics built a traditional trucking business by Kirsten Korosec

The Stanford connection behind Latin America’s multi-billion dollar startup renaissance by Jon Shieber 

How to calculate your event ROI by Sarah Shewey

Why four security companies just sold for $1.5B by Ron Miller 

Scooters gonna scoot

In case you missed it, Bird is in negotiations to acquire Scoot, a smaller scooter upstart with licenses to operate in the coveted market of San Francisco. Scoot was last valued at around $71 million, having raised about $47 million in equity funding to date from Scout Ventures, Vision Ridge Partners, angel investor Joanne Wilson and more. Bird, of course, is a whole lot larger, valued at $2.3 billion recently.

On top of this deal, there was no shortage of scooter news this week. Bird, for example, unveiled the Bird Cruiser, an electric vehicle that is essentially a blend between a bicycle and a moped. Here’s more on the booming scooter industry.

Startup Capital

WorldRemit raises $175M at a $900M valuation to help users send money to contacts in emerging markets 

Thumbtack is raising up to $120M on a flat valuation

Depop, a shopping app for millennials, bags $62M

Fitness startup Mirror nears $300M valuation with fresh funding

Step raises $22.5M led by Stripe to build no-fee banking services for teens

Possible Finance lands $10.5M to provide kinder short-term loans

Voatz raises $7M for its mobile voting technology

Flexible housing startup raises $2.5M

Legacy, a sperm testing and freezing service, raises $1.5M

Equity

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I discuss how a future without the SoftBank Vision Fund would look, Peloton’s IPO and data-driven investing.

Zoom outperforms in first-ever earnings report

2019 is a great year for Zoom (Nasdaq:: ZM). The company outperformed analyst expectations on Thursday upon the release of its first earnings report.

The video communications business, which went public in one of the year’s most successful initial public offerings this April, posted revenues of $122 million for the three months ended April 30, 2019, an increase of 109% year-over-year.

The Zoom stock is rising in after-hours trading following the news. Zoom closed up 2 percent Thursday at just over $79 per share. The stock has been trading at more than double initial offering price in two months following its IPO.

“In our first quarter as a public company, strong execution and expanding adoption of Zoom’s video-first unified communications platform drove total revenue growth of 103% year-over-year,” Zoom founder and chief executive officer Eric Yuan said in a statement. “Delivering happiness to our customers is our number one priority. If we keep them happy, we believe we will succeed today and in the future.”

Zoom, once a relatively under-the-radar tech unicorn, continues to defy expectations. The company priced its IPO back in April at a meager $36 per share only to pop 81% at its Nasdaq debut.

Its first-earnings report beat expectations once again. Analysts had expected revenue of $111.4 million with adjusted earnings per share of just under 1 cent, compared to Zoom’s confirmed earnings of 3 cents per share.

For the full year, Zoom expects total revenue of between $535 million and $540 million and non-GAAP income (loss) from operations of between $0 and $3 million.

This story is updating.