Hyundai takes minority stake in self-driving car startup Aurora

Hyundai Motor Group has invested in Aurora, the latest sign that the scope of the year-old partnership between the automaker and self-driving car startup has expanded.

Aurora and Hyundai didn’t disclose terms of the investment. However, picking part new details of its Series B funding round and speaking to sources within the industry, Hyundai’s investment is below $30 million.

Aurora announced in February that it had raised more than $530 million in a Series B round that was led by Sequoia Capital and included “significant investment” from Amazon and T. Rowe Price Associates. Since then, that Series B round has expanded to more than $600 million with new investment from Hyundai, Baillie Gifford and the Canada Pension Plan Investment Board, TechCrunch has learned.

To date, Aurora has raised more than $700 million, a figure that includes its seed round Series A round of $90 million.

Hyundai’s stake in Aurora is an affirmation of the company and their working relationship. But it’s just one measure. What Aurora is actually doing matters as much.

When the partnership was first announced in January 2018, the details of the relationship were scant. New information reveals that Aurora has been working with Hyundai and Kia for the last year to integrate its “Driver” into Hyundai’s flagship fuel cell vehicle NEXO.

Aurora says it will expand research and development of a self-driving platform for a wide range of Hyundai and Kia’s models.

Aurora, which launched in January 2017, works with companies like Hyundai, Byton, and until more recently Volkswagen, to design and develop a package of sensors, software, and data services needed to deploy autonomous vehicles. The company describes this “full stack,” (an industry parlance) the Aurora Driver.

Aurora, like many of its competitors, are focused on Level 4 autonomous systems with an eye toward Level 5. Level 4 is a designation by SAE, the automotive engineering association, for autonomous vehicles that take over all driving in certain conditions. In Level 5 autonomy, the vehicle is self-driving in all situations.

About a year after Aurora’s official launch date, the company announced partnerships with Hyundai and Volkswagen, followed by a Series A funding raise that resulted in two new board members — LinkedIn co-founder and Greylock partner Reid Hoffman and Mike Volpi, former chief strategy officer at Cisco and general partner at Index Ventures.

Volkswagen has since ended its partnership with Aurora. Meanwhile, Fiat Chrysler Automobiles has announced a collaboration with Aurora to to develop self-driving commercial vehicles. The partnership with FCA will focus on integrating Aurora’s technology into the automaker’s line of Ram Truck commercial vehicles, a portfolio that includes cargo vans and trucks. The deal could extend to FCA’s Fiat Professional brand as well, TechCrunch has learned.

Fiat Chrysler partners with Aurora to develop self-driving commercial vans

Aurora, the autonomous vehicle technology startup backed by Sequoia Capital and Amazon, has struck a deal with Fiat Chrysler Automobiles to develop self-driving commercial vehicles.

The partnership will focus on integrating Aurora’s technology into FCA’s line of Ram Truck commercial vehicles, a portfolio that includes cargo vans and trucks. The deal could extend to FCA’s Fiat Professional brand as well, TechCrunch has learned.

The deal with Aurora aims to specifically develop and deploy self-driving commercial vehicles that could be used by any third party with a delivery-to-consumer need. For instance, once Aurora’s technology is integrated into its commercial vans, FCA could sell them to a third-party logistics company — like say, Amazon — that intends to use autonomous vehicles for deliveries.

Neither company disclosed financial terms of the deal.

The high cost of developing and bringing technology such as electrification and autonomous vehicles to market has prompted automakers, including FCA, to seek out partnerships and alliances, sometimes even with competitors.

In May, FCA proposed a 50-50 merger with French automaker Renault, arguing that it would create a more capital efficient enterprise that could develop global vehicle platforms, architectures, powertrains and technologies.

FCA has since withdrawn its merger offer. However, more partnerships are likely to emerge.

“As part of FCA’s autonomous vehicle strategy we will continue to work with strategic partners in this space to address the needs of consumers in a rapidly changing industry,” FCA CEO Mike Manley said in a statement.

FCA has an existing partnership with autonomous vehicle technology company Waymo, the former Google moonshot project that is now a business under Alphabet. These two relationships are tackling different aspects of autonomous vehicle technology — at least for now.

Two years ago, FCA said it would produce about 100 Chrysler Pacifica Hybrid minivans integrated with Waymo’s suite of self-driving hardware and software. Waymo uses these self-driving minivans for testing as well as for its Waymo One autonomous ride-hailing business in the Phoenix area. The autonomous vehicles used in the Waymo One service still have a human safety driver behind the wheel.

FCA and Waymo expanded on their relationship in 2018 with FCA announcing it would supply Waymo with up to 62,000 more Chrysler  Pacifica minivans.

Unlike Waymo, Aurora has never indicated plans publicly to launch a robotaxi service. Instead, it’s focused on supplying and then integrating its full self-driving stack to companies hoping to deploy autonomous vehicles or services.

Aurora, founded in early 2017 by Sterling Anderson, Drew Bagnell and Chris Urmson, has integrated its technology into six vehicle platforms, including sedans, SUVs, minivans, a large commercial vehicle and a Class 8 truck.

Aurora is just a few months removed from announcing its hefty $530 million Series B round that was led by Sequoia Capital and included “significant investment” from Amazon and T. Rowe Price Associates. The round pushed Aurora’s valuation to more than $2.5 billion. Aurora announced a $90 million Series A round last February from Greylock Partners  and Index Ventures, bringing its total raised to date to more than $620 million.

The company has offices in Palo Alto, San Francisco and Pittsburgh and previously announced partnerships with Volkswagen Group, Hyundai and Chinese electric vehicle startup Byton.

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.

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

Ten years ago, Sequoia Capital began quietly encouraging founders of its portfolio companies to consider which of their founder friends they might like to get behind financially. Sequoia would let them write checks to those companies, and it would share with them any later rewards.

It was a brilliant idea. It allowed Sequoia to keep tabs on entrepreneurs — and nascent technologies — not yet in its universe. It cemented the firm’s ties to the founders who were already in its family. Not last, it grew Sequoia’s already considerable influence in Silicon Valley.

Fast forward, and the ripple effects of the highly successful program have not only been wide-reaching, but they’ve quietly reshaped the industry in ways that only those closest to Sequoia have been able to fully appreciate — until now.

To learn more on the tenth anniversary of Sequoia’s “scouts” initiative — which has since been widely copied by other venture firms — we reached out to Sequoia’s Mike Vernal, the partner who today oversees the seed-stage program, as well as four scouts whose names you will recognize. What we learned in the process is that their experiences, while fairly different, have had an outsize impact on the way they lead as well, as on the founders whose paths have crossed with their own.

Ready, set. . .

It began working almost immediately, too. Among those first scouts — one of now hundreds to work with Sequoia — was Jason Calacanis, a serial entrepreneur whose then startup, a search engine called Mahalo, quickly raised $20 million from Sequoia and others after its 2007 founding.

Mahalo didn’t wind up putting Google or Yahoo out of business, but even back then, Calacanis, who’d earlier sold a blog network to AOL, had an established network that Sequoia realized was valuable. As Calacanis tells it, he’d told Sequoia about Zynga when its founder, Mark Pincus, was still figuring out the company in 2007. He’d also told Sequoia about a project that his friend Ev Williams was fiddling with. Both times, it passed.

Those decisions seemed to smart. At least, not long after, Sequoia’s Roelof Botha reached out to Calacanis and asked him, “‘What if we’d just given you some money to make those investments?'”

According to Calacanis, Botha explained that if he could turn up other interesting deals, Sequoia would give him money to invest, then split some of the profits with him and other Sequoia-backed founders who it was also inviting to scout deals on its behalf. (One of them was Sam Altman, then the founder of another Sequoia-backed startup called Loopt. Other early scouts included Airbnb CEO Brian Chesky, and Dropbox founders Arash Ferdowsi and Drew Houston.)

Calacanis loved the proposal, though he chafed at Botha’s insistence that he write an investment memo. As pushback, Calacanis says his first deal memo as a scout included two words, “Cabs suck.”

Calacanis laughs about it now. “I was protesting the fact that Roelof was making me do homework.” As it turns out, his short memo was spot on. The company Calacanis wanted to back was Uber. Sequoia approved it, and the small stake ultimately grew to be valued at “over nine figures,” according to Calacanis, who has collectively plugged $600,000 into 20 startups over the years as part of Sequoia’s scouts program.

From scout to VC . . .

As industry watchers may know, Calacanis has since gone on to raise his own funds, including two $10 million vehicles, and, more recently, a $30 million fund. Yet he’s far from the only person to learn the ropes with Sequoia’s help.

Altman, of course, went on to advise Y Combinator companies, then to become the organization’s president, before resigning earlier this year.  Other former scouts who have joined the world of venture capital full-time include Lee Linden of Quiet Capital, David Ulevitch of Andreessen Horowitz, Jana Messerschmidt of Lightspeed Venture Partners, Cat Lee of Maveron, and Deep Nishar of SoftBank Investment Advisors.

Three other former scouts have landed inside of Sequoia itself: Vernal, who before joining Sequoia spent more than eight years at Facebook, including as a vice president of engineering and product; Jess Lee, who previously cofounded the shopping site Polyvore and oversaw its sale to Yahoo; and Alfred Lin, the former COO and chairman of Zappos.

Not every scout has been plucked from Sequoia’s portfolio, as Mike Vernal himself makes plain. Though Vernal declines to delve into certain specifics about the program, including exactly how many scouts have worked with Sequoia, he says that while “early on, in that first batch, the program was biased toward Sequoia companies,” it’s no longer the case that Sequoia taps only the founders it has already backed.

We also know that Sequoia is now in the middle of its fifth batch of scouts, that it chooses two “classes” of scouts for each separate scout fund, and there have been three to date, including a $180 million fund it closed last year.

As for how much they have to spend, scouts are given up to $100,000. Some invest a little bit in a lot of companies; others invest more in a few. Their checks tend to lead to more checks, too, unsurprisingly. More than 230 companies that have received checks written by Sequoia scouts have gone on to raise more than $6 billion in follow-on financing, excluding Uber. Many of these have received further funding from Sequoia itself, including Faire, GenEdit, Guardant Health, Stripe, Thumbtack, and Vector.

It can also prove a lucrative side gig for those in Sequoia’s scouting program. According to Calacanis, for example, Altman wrote a check to Stripe as a scout, a position that’s now worth $25 million. As with Uber, Calacanis says, “It’s likely that everyone in that class will get a taste of that, too.”

No blank checks . . .

Still, being a scout does not mean having carte blanche to do whatever one chooses. When PlanGrid cofounder and CEO Tracy Young was asked by one of the partners to become a scout for Sequoia, “I had no idea what that meant, but they basically give us $100,000 to do whatever we want, assuming it passes a stringent approval process. [Sequoia] wants to know: how big can this get? What’s the market?”

It can take “hours of conversation” with a founder before Young — whose Sequoia-backed construction software company sold last year to Autodesk for a whopping $875 million — is able to “write up this whole thing, almost like a business plan” to pitch Sequoia, she says.

It may sound inconvenient, but she has learned much from this back-and-forth, she says. “Much of what we do as founders centers on our own problems within our own companies in our own industries. I’m in the construction software world every day, and [being a scout] has enabled me to see other companies’ problems in a deeper way.”

Clara Shih, a scout and the founder and CEO of Hearsay Systems, a Sequoia-backed digital marketing platform for financial services, echoes the sentiment, adding that the “series of diligence items that we go through” also helps to sharpen her thinking about her own company.

“When you’re the CEO of a company, that’s your baby and you’re biased in favor of your own startup,” says Shih. Scouting on behalf of Sequoia — along with her role as a director on the board of Starbucks —  “helps me think what would someone from the outside be [prioritize as part of] their strategy for Hearsay. It helps me to think more objectively and gets me out of the minutiae” that can occupy a founder’s thoughts and time otherwise.

Altogether, Young says she has made “six of seven” investments to date on behalf of Sequoia, and “probably talked with 50 companies” altogether, though not always with investing in mind. Shih has made a similar number of bets.

Both say their primary responsibilities are running their companies but that they are often contacted by founders who are looking to them for advice, and that it’s during these meetings that they sometimes wear the hat of investor, too.

“I’m not out there prospecting,” says Shih, “but a lot of women entrepreneurs reach out to me, because there are still too few of us and it’s my mission to change that.” Young meanwhile says she hears from founders in spaces “adjacent” to her own.

Both suggest that becoming a VC that it’s a path to which they’re open — though not yet. “I have a very busy full-time job,” says Shih. Young also says she’s “full time at Autodesk right now, integrating PlanGrid into the company.”

Still, she continues, “We’ll see. I’m pretty sure a lot of [people in the scout program] are going to become future VCs because a lot of them are really good at investing in and valuing companies.”

A lot of them are also women and minorities, she notes. “I’m biased,” says Young, “but having pitched to a lot of white men at different venture firms, including at Sequoia in 2014, when you walk into a room of scouts, it’s super diverse. It just feels different.”

Calacanis tells us the same. “They’ll never get enough credit for this, but one thing Sequoia did was use scouts to radically increase the amount of diversity in the industry,” he says. “Ten years ago, it was a bunch of Stanford people of a certain gender and [skin] color. But they opened the aperture to get more women and underrepresented investors” into their network, and he says it’s now among the most diverse groups in Silicon Valley — even if it’s also one of the lowest-flying.

Down the road . . .

One outstanding question is what happens when a scout sell his or her company, or takes it public, or otherwise becomes wealthy enough to invest on their own. After all, Sequoia tends to work with founders who have the contacts and the industry know-how, but who also need its financial support if they want to invest in their founder friends.

Calacanis falls into this category, yet says he still does the occasional scout deal and happily. “Sequoia is the greatest venture firm in the world. Whatever they ask me to do, it’s like ‘Yes.’ It’s a no-brainer.”

Another member of this particular club is Matt Macinnis, the founder of Sequoia-backed Inkling Systems, which sold for an undisclosed amount to the private equity firm Marlin Equity Partners last year. Macinnis is today the COO of Rippling, the online payroll and HR startup founded by Zenefits cofounder Parker Conrad, and he says that he has written 24 checks for Sequoia over the last five years, including to note-taking app Notion (founder Ivan Zhao spent a year working on product at Inkling) and the education applications company Clever, whose founder was a Harvard classmate of Macinnis.

Macinnis suggests that as he has begun investing more actively as an angel investor, deciding how much of his own money to pour into a company has become a more complicated affair. Yet like Calacanis, he only sings Sequoia’s praises.

He points to a new investment in Memfault, a startup that was among the most popular to graduate from the Y Combinator’s accelerator program this past winter. He says he was “super excited about the company because they’re doing firmware deployment to internet of things devices — doorknobs, cars, temperature sensors.” He also liked that the startup’s CTO came out of Fitbit.

In fact, he excitedly told Sequoia about the company.  The good news: Sequoia partner Bill Coughran — a former SVP of engineering at Google who well understands hardware — grew excited, too. The bad news, he made the company an offer before Macinnis had closed his own investment.  (Says Macinnis, the company was “surprise, surprise, oversubscribed right away.”)

Given different circumstances, Macinnis might have been out of luck. Instead, he says. “It was not problem at all. Bill adjusted the allocation so that both [I] and the scout program and the founder were able to get the desired outcome. He made room.”

There’s allegiance for good reason, suggests Macinnis, who implies that scouts get as much if not more than Sequoia from their relationship. To underscore his point, he points to DoorDash founder and former scout Tony Xu, whose company is currently valued at $7.1 billion,  and to Weebly cofounder David Rusenko, whose Sequoia-backed company sold last year to Square for $365 million. “I’m not Tony or David,” he says, “but those guys wouldn’t hesitate for a millisecond to pitch in and help a scouts company however they could.”

Says Calacanis separately, “I thought angel investing was stupid” before becoming a scout, which he credits with changing his career trajectory. “I thought I should invest in myself, that I was the smartest entrepreneur I know.” Sequoia, he says, knew better. “They know If you’re smart, your friends are probably pretty smart, too.”

Pictured above: Mike Vernal and Tracy Young. 

Aurora’s head of product is coming to TC Sessions: Mobility

Self-driving car startup Aurora might be as buzzy as they come. The company raised more than $530 million just a few months ago in a round led by Sequoia Capital and with “significant investment” from Amazon and T. Rowe Price Associates. We’ve learned Aurora isn’t shy about using that capital with two acquisitions in the books.

But how, when and where will Aurora’s autonomous vehicle technology end up? Lia Theodosiou-Pisanelli, who leads product development and program management for all of Aurora’s partnerships, will join us on stage at TC Sessions: Mobility to give us the scoop.

Theodosiou-Pisanelli has had an up close view of the autonomous vehicle industry. Prior to joining Aurora this spring, she was director of business development for Lyft’s self-driving technology business Level 5.

Her background in global government relations at Square as well as a U.S. Trade Representative at the White House, gives Theodosiou-Pisanelli’s insight into how policy and regulations are shaped and might eventually affect the autonomous vehicle industry.

TC Sessions: Mobility will be held July 10 in San Jose. The agenda is packed with some of the biggest names and most exciting startups in the transportation industry, including Mobilieye co-founder and CEO Amnon Shashua, Alisyn Malek with May Mobility, Dmitri Dolgov at Waymo, Karl Iagnemma of Aptiv, Seleta Reynolds of the Los Angeles Department of Transportation, and Ford Motor CTO Ken Washington. With Early-Bird ticket sales ending soon, you’ll want to be sure to grab your tickets.

Throughout the day, you can expect to hear from and partake in discussions about the future of transportation, the promise and problems of autonomous vehicles, the potential for bikes and scooters, investing in early-stage startups and more.

Early-Bird tickets are now on sale — save $100 on tickets before prices go up after June 14.

Students, you can grab your tickets for just $45.

Password manager Dashlane raises $110M in Series D, adds CMO

Password manager maker Dashlane has raised $110 million in its latest round of funding, the company said Thursday.

The company said Sequoia Capital led the Series D round, with partner Jim Goetz joining the board. Dashlane also said former Lyft executive Joy Howard was appointed as its new chief marketing officer and will start in August.

Dashlane said it will invest its latest funds back into its core product and will focus on addressing the needs of its consumer and business customers.

Chief executive Emmanuel Schalit said the company is “only scratching the surface” of its security opportunities.

“Billions of people and millions of businesses around the world feel the pain of digital identity – from breaches to stolen identities and the nuisance of remembering passwords,” said Schalit.

“With this new capital and the addition of Joy to our leadership team, we have the resources to increase our product leadership, grow the team, and build the brand that will define the future of digital identity protection,” he added.

Password managers have become all the rage in recent years following a spate of credential stuffing attacks, where hackers take breached usernames and passwords from sites and reuse them on other site accounts. By storing passwords in a single place protected by a master password or a biometric — such as a fingerprint — users can take their strong and uniquely generated passwords with them wherever they go.

Dashlane has raised over $185 million to date.

How to trigger FOMO among VCs, plus PMs, SoftBank, and cheese

Fundraising 101: How to trigger FOMO among VCs

Our media columnist Eric Peckham talked to a variety of successful founders on how they generate FOMO (i.e. fear of missing out) among VCs during their fundraises. While having a great deck and story is key to startup success, clearly there is also a bit of the dark arts required to go from intro email to term sheet.

We focused on a two-week period and set all the meetings for Thursday and Friday. From 7am into the evening, back-to-back pitches at all the firms in one area then the next area. That’s because partner meetings are on Mondays, so the Thursday and Friday conversations would lead to pitching the whole partnership the following Monday. We had a 24-hour rule: if we didn’t hear back from a fund in 24 hours, we crossed them off the list.

and

According to this CEO, Sequoia and Benchmark are the best at throwing entrepreneurs off their process in order to get ahead of the competition. Sequoia will typically arrange meetings for the morning so they can invite you back for a second meeting with more partners that same afternoon; Benchmark’s partners are quick to travel to wherever you are in the world and sell you on working together (with a term sheet at the ready).

Q&A with J Crowley, Head of Product at Airbnb Lux, on what makes a great PM

Our editor Jordan Crook did a great interview with J Crowley of Airbnb Lux and formerly of Foursquare, and the two of them discussed the opportunities and challenges of being a PM, how to deal with failure, and how to be a leader on a product team.

Fundraising 101: How to trigger FOMO among VCs

Let’s go beyond the high-level fundraising advice that fills VC blogs. If you have a compelling business and have educated yourself on crafting a pitch deck and getting warm intros to VCs, there are still specific questions about the strategy to follow for your fundraise.

How can you make your round “hot” and trigger a fear of missing out (FOMO) among investors? How can you fundraise faster to reduce the distraction it has on running your business?

“You’re trying to make a market for your equity. In order to make a market you need multiple people lining up at the same time.”
Unsurprisingly, I’ve noticed that experienced founders tend to be more systematic in the tactics they employ to raise capital. So I asked several who have raised tens (or hundreds) of millions in VC funding to share specific strategies for raising money on their terms. Here’s their advice.

(The three high-profile CEOs who agreed to share their specific playbooks requested anonymity so VCs don’t know which is theirs. I’ve nicknamed them Founder A, Founder B, and Founder C.)

Have additional fundraising tactics to share? Email me at [email protected].

Table of Contents

You need to create a market for your shares

“You’re trying to make a market for your equity. In order to make a market, you need multiple people lining up at the same time.”

That advice from Atrium CEO Justin Kan (a co-founder of companies like Twitch and former partner at Y Combinator) was reiterated by all the entrepreneurs I interviewed. Fundraising should be a sprint, not a marathon, otherwise the loss of momentum will make it more difficult.

The Crunchbase Unicorn Leaderboard is back, now with a record herd of 452 unicorns

We are very pleased to announce that the new and improved Crunchbase Unicorn Leaderboard re-launched today after nearly a year’s absence from TechCrunch.

Venture investors did a lot of handwringing in the past year over rising valuations, but that did not slow the unicorn juggernaut, as 2018 outstripped all previous years in terms of the number of unicorns created and venture dollars invested. Indeed, 151 new unicorns joined the list in 2018 (compared to 96 in 2017), and investors poured more than $135 billion into those companies, a 52% increase year over year and the biggest sum invested in unicorns in any one year since unicorns became a thing.

Back in 2013, Cowboy Ventures’ Aileen Lee coined the term “unicorn” in a piece on TechCrunch with her report stating “39 companies belong to what we call the ‘Unicorn Club’ with four unicorns born per year in the past decade, … with Facebook being the breakout ‘super-unicorn’ (worth >$100 billion).” A lot has changed in six years.

From 19 new unicorns in 2013, roughly two each month, we now see a new unicorn coming into being every two working days. In 2019 so far, 42 new unicorns have joined the unicorn leaderboard, and by next week that number will have jumped again.

The Unicorn Leaderboard now lists 452 companies, which have collectively raised $345 billion and represent a cumulative valuation of $1.6 trillion. Go back to February 2018 and there were just 279 companies, with $206 billion raised and valued at $1 trillion. In just 15 months 170+ companies reached unicorn status, raised $140 billion more and added $600 billion in company valuations.

View by investor, sector and country

On the new leaderboard, it’s possible to filter by investor, lead investor, market sector and country. The unicorn leaders are the U.S. with 196 companies, China with 165, India with 19 and the U.K. with 12.

Leading investors

Three well-known venture firms, Sequoia Capital, Accel and Andreessen Horowitz, have invested in the most unicorn rounds. The investors that actually led the most rounds are corporate investor Tencent Holdings, venture firm Sequoia Capital and private equity firm Tiger Global Management. The rise of Tencent Holdings and Tiger Global Management reflect the prominence of China-based unicorns, as well as the increase in investment from corporate and alternative investors.

Emerging unicorns

The leaderboard also hosts a list of companies that have disclosed valuations between $500 million and > $1 billion and may well reach unicorn status with their next capital raise, unless, of course, they exit before then.

Unicorn exits

The majority of these 452 companies are in the U.S. or China, and most will plan to exit (go public or get acquired) within the next five to eight years.

2018 was also the best year ever for unicorn exits, as 39 unicorns went public while 14 were acquired. This year so far, six U.S.-based unicorns have gone public, namely, Uber, Lyft, Pinterest, Zoom, PagerDuty and Beyond Meat, representing $131.5 billion in public valuations, with Uber at  $82.5 billion and Lyft at $24 billion. The first Africa-based unicorn to go public is Jumia Group, an e-commerce company that operates in 14 African countries. Four China-based unicorn companies went public so far this year: Maoyan, an online movie ticketing service; mobile stock investing service Tiger Brokers; Lakala, a fintech platform; and, most recently, Luckin Coffee, a retail coffee brand. Hong Kong-based Futu Holdings, an online stock platform, also went public this year.

More than a one-third of all unicorn exits took place in 2018. The exited unicorns section of the Crunchbase Leaderboard lists 144 companies; roughly two-thirds of these companies (98) went public and the balance (46) were acquired.

Is 2018 the peak?

2018 might well be the peak, but 2019 is still strong, with 42 new unicorns announced this year so far, and $33.6 billion invested in this cohort of private companies. With the record of 452 unicorns, $345 billion currently invested, $1.6 trillion in captured value and an average age of 8.2 years since being founded, 2019 will be the year we watch the IPO market closely.

Credit: Steven Rossi who manages the board, Santosh Ankola on the TechCrunch product team and Human Made Design for their work on recreating the board.

Fresh off a $530M round, Aurora acquires lidar startup Blackmore

Aurora, the self-driving car startup backed by Sequoia Capital and Amazon, is in an acquiring mood. The company, founded in early 2017 by Chris Urmson, Sterling Anderson and Drew Bagnell, announced Thursday that it acquired lidar company Blackmore.

The Blackmore purchase follows another smaller, and previously unknown acquisition of 7D Labs that occurred earlier this year, TechCrunch has learned. 7D, founded by former software engineer from Pixar animation Magnus Wrenninge, is a simulation startup that makes photorealistic synthetic dataset for street scenes. Aurora confirmed the acquisition.

Aurora’s larger Blackmore acquisition come on the heels of its $530 million Series B funding round led by Sequoia Capital and “significant investment” from Amazon and T. Rowe Price Associates. Aurora did not disclose the terms of the deal.

Lidar, or light detection and ranging radar, measures distance. It’s considered by many in the emerging automated driving industry — with the exception of Tesla CEO Elon Musk and a handful of others — as a critical and necessary sensor for self-driving vehicles.

Blackmore, which has 70 employees, might not be a household name. And its base of operations in Bozeman, Montana makes it a seeming oddball amongst the Silicon Valley scene.

But in the world of autonomous vehicles, Blackmore is well known and has been considered an acquisition target for some time. Two funding rounds in 2016 and 2018 that brought in backers like BMW i Ventures and Toyota AI Ventures raised Blackmore’s profile. (The company has raised $21.5 million). Cruise, GM’s self-driving unit, was looking at the company last year, according to two sources familiar with the discussions.

But it’s the company’s tech that got Aurora CEO Chris Urmson’s attention.

Blackmore CEO Randy Reibel, noted in a recent interview, a highlight was getting a chance to see the look on Urmson’s face when he first saw the lidar in action.

Not all lidar is the same, both Urmson and Reibel noted. The vast majority of the 70-odd companies that exist in the industry today are developing and trying to sell AM lidar sensors, which send out pulses of light outside the visible spectrum and then track how long it takes for each of those pulses to return. As they come back, the direction of, and distance to, whatever those pulses hit are recorded as a point and eventually forms a 3D map.

Blackmore is one of the few companies developing Frequency Modulated Continuous Wave (FMCW) lidar, which emits a low power and continuous wave, a bit like keeping a flashlight on, the company’s CTO and co-founder Stephen Crouch explained. The upshot is FMCW lidar can measure distance with a higher dynamic range and instant velocity, meaning it can gauge the speed of the objects coming to or moving away from them. It’s also “immune” to interference from sun or other other sensors, Crouch added.

The big win, Urmson and Reibel echoed, is that it is optimized with the perception stack. In other words, this lidar is technically compatible in a way that will improve perception of Aurora’s “driver.”

The acquisition of Blackmore is just one example in the past two months of lidar startups either announcing large equity and debt rounds or being snapped up by companies developing autonomous vehicle technology. In 2017, Cruise acquired Strobe and Argo AI bought Princeton Lightwave.

That kind of consolidation will likely continue, Reibel predicted, in part because it’s challenging for lidar companies to “go it alone.” AV companies are particularly protective of their tech and opening the door to an outside lidar company takes convincing.