What to make of Stripe’s possible $100B valuation

This is The TechCrunch Exchange, a newsletter that goes out on Saturdays, based on the column of the same name. You can sign up for the email here.

Welcome to a special Thanksgiving edition of The Exchange. Today we will be brief. But not silent, as there is much to talk about.

Up top, The Exchange noodled on the Slack-Salesforce deal here, so please catch up if you missed that while eating pie for breakfast yesterday. And, sadly, I have no idea why Palantir is seeing its value skyrocket. Normally we’d discuss it, asking ourselves what its gains could mean for the lower tiers of private SaaS companies. But as its public market movement appears to be an artificial bump in value, we’ll just wait.

Here’s what I want to talk about this fine Saturday: Bloomberg reporting that Stripe is in the market for more money, at a price that could value the company at “more than $70 billion or significantly higher, at as much as $100 billion.”

Hot damn. Stripe would become the first or second most valuable startup in the world at those prices, depending on how you count. Startup is a weird word to use for a company worth that much, but as Stripe is still clinging to the private markets like some sort of liferaft, keeps raising external funds, and is presumably more focused on growth than profitability, it retains the hallmark qualities of a tech startup, so, sure, we can call it one.

Which is odd, because Stripe is a huge concern that could be worth twelve-figures, provided that gets that $100 billion price tag. It’s hard to come up with a good reason for why it’s still private, other than the fact that it can get away with it.

Anyhoo, are those reported, possible prices bonkers? Maybe. But there is some logic to them. Recall that Square and PayPal earnings pointed to strong payments volume in recent quarters, which bodes well for Stripe’s own recent growth. Also note that 14 months ago or so, Stripe was already processing “hundreds of billions of dollars of transactions a year.”

You can do fun math at this juncture. Let’s say Stripe’s processing volume was $200 billion last September, and $400 billion today, thinking of the number as an annualized metric. Stripe charges 2.9% plus $0.30 for a transaction, so let’s call it 3% for the sake of simplicity and being conservative. That math shakes out to a run rate of $12 billion.

Now, the company’s actual numbers could be closer to $100 billion, $150 billion and $4.5 billion, right? And Stripe won’t have the same gross margins as Slack .

But you can start to see why Stripe’s new rumored prices aren’t 100% wild. You can make the multiples work if you are a believer in the company’s growth story. And helping the argument are its public comps. Square’s stock has more than tripled this year. PayPal’s value has more than doubled. Adyen’s shares have almost doubled. That’s the sort of public market pull that can really help a super-late-stage startup looking to raise new capital and secure an aggressive price.

To wrap, Stripe’s possible new valuation could make some sense. The fact that it is still a private company does not.

Market Notes

Various and Sundry

And speaking of edtech, Equity’s Natasha Mascarenhas and our intrepid producer Chris Gates put together a special ep on the education technology market. You can listen to it here. It’s good.

Hugs and let’s both go do some cardio,

Alex

How Ryan Reynolds and Mint Mobile worked without becoming the joke

In the past decade, celebrity interest and investment in tech companies has significantly increased. But not all celebrity investments are created equally. Some investors, like Ashton Kutcher, have prioritized the VC pursuits. Some have invested casually without getting overly involved. Others have used their considerable platforms to market their portfolio to varying degrees of success.

It’s been a little over a year since Ryan Reynolds bought a majority stake in Mint Mobile, a deal that has already had a dramatic impact on the the MVNO (mobile virtual network operator).

The four-year-old company has seen a tremendous amount of growth, boosting revenue nearly 50,000% in the past three years. However, the D2C wireless carrier has seen its highest traffic days on the backs of Reynolds’ marketing initiatives and announcements.

There is a long history of celebrities getting involved with brands, either as brand ambassadors or ‘Creative Directors’ without much value other than the initial press wave.

Lenovo famously hired Ashton Kutcher as a product engineer to help develop the Yoga 2 tablet, on which I assume you are all reading this post. Alicia Keys was brought on as BlackBerry’s Global Creative Director, which felt even more convoluted a partnership than Lady Gaga’s stint as Polaroid’s Creative Director. That’s not to say that these publicity stunts necessarily hurt the brands or the products (most of the time), but they probably didn’t help much, and likely cost a fortune.

And then there are the actual financial investments, in areas where celebrities fundamentally understand the industry, that still didn’t get to ‘alpha.’

Even Jay-Z has struggled to make a music streaming service successful. Justin Bieber never really got a selfie app off the ground. Heck, not even Justin Timberlake could breathe life back into MySpace. Reynolds seemingly has an even heavier lift here. It’s hard to imagine a string of words in the English language less sexy than, “mobile virtual network operator.”

Reynolds tells TechCrunch that he viewed celebrity investments as a kind of “handicapping,” prior to the Mint acquisition.

“I’ve just sort of seen how most celebrities are doing very, very well,” he explains. “We’re generally hocking or getting behind or investing in luxury and aspirational items and projects. Then George and I had a conversation about a year-and-a-half ago, maybe longer, about what if we swerved the other way? What if he kind of got into something that was hyper practical and just forget about the sexy aspirational stuff.”

Mint isn’t Reynolds’ first entrepreneurial venture. He bought a majority stake in Portland-based Aviation Gin in 2018, which recently sold for $610 million. He also cofounded marketing agency Maximum Effort alongside George Dewey, which has made its own impact over the past several years.

Maximum Effort was founded to help promote the actor’s first Deadpool film. Reynolds and Dewey had come up with several low-budget spots to get people excited about an R-rated comic book movie. The bid appears to have worked. The film raked in $783.1 million at the box office — a record for an R-rated film that held until the 2019 release of Joker.

Maximum Effort (and Reynolds) was also behind the viral Aviation Gin spot, which poked fun at the manipulative Peloton ad that aired last year around the holidays. The same actress who portrayed a woman seemingly tortured by her holiday gift of a Peloton sits at a bar with her friends, shell-shocked, sipping a Martini.

The original ad on YouTube, not counting recirculation by the media, has more than 7 million hits. Reynolds calls it ‘fast-vertising’.

“We get to react,” he told TechCrunch. “We get to acknowledge and play with the cultural landscape in real time and react to it in real time. There isn’t any red tape to come through, because it’s just a matter of signing off on the approval. So in a way, it’s unfair, in that sense, because most big corporations, they take weeks and weeks or months to get something approved. Our budgets are down and dirty, fast and cheap.”

He explained that this type of real-time marketing is only possible because he’s the owner of Maximum Effort (and in some cases of the client businesses, as well), but because there is no red tape to cut through when a great idea presents itself.

Reynolds has brought this marketing acumen to Mint Mobile in a big way. Last year during the Super Bowl, Reynolds took out a full page ad in The New York Times, explaining that the decision to spend $125,000 on a print ad instead of $5 million+ on a Super Bowl commercial would enable the prepaid carrier to pass the savings on to consumers.

In October, Reynolds spun Mint’s 5G launch into another light-hearted spot. He brought on the head of mobile technology to explain what 5G actually is, and after hearing the technical explanation, happily said “We may never know, so we’ll just give it away for free.”

Mint also released a holiday ad just a couple of weeks ago warning of wireless promo season, wherein large wireless carriers may try to lure customers into expensive contracts using new devices. Standing over a bear trap, Reynolds dryly states: “At Mint Mobile, we don’t hate you.”

Reynolds enjoys nearly 17 million Twitter followers and more than 36 million Instagram followers. He uses both platforms to promote his various brands without alienating his followers. Moreover, he doesn’t exclusively promote his brands on social media, but weaves in his own funny personal commentary or gives followers a peek into his marriage with Blake Lively, which we can all agree is #relationshipgoals.

Mint Mobile partners exclusively with T-Mobile to provide service, and unlike some other MVNOs, it uses a direct-to-consumer model, foregoing any physical footprint. Plans start at $15/month and top out at $30/month. CMO Aron North says that Reynolds’ ownership and involvement with Mint Mobile is “absolutely critical.”

“Ryan is an A plus plus celebrity, and he’s very funny and entertaining and engaging,” said North. “His reach has given us a much bigger platform to speak on. I would say he is absolutely critical in our success and our growth.”

We asked Reynolds if he has any specific plans for further tech investment, or if there are any trends he’s keeping an eye on. He explained that his motivations are not purely capitalistic.

“I’m really focused on community and bringing people together,” said Reynolds. “We think it’s super cool to bring people together, particularly in a world that is very divisive. Even in our marketing, we try to find ways to have huge cultural moments without polarizing people without dividing people without saying one thing is wrong.”

In one of the company’s more notable recent spots, Reynolds enlisted the help of iconic comedian, Rick Moranis. It was an impressive coup, given the actor’s seeming retreat from the public eye, turning down two separate Ghostbusters film reboots.

“It’s funny what happens when you just ask,” says Reynolds. “I explained that people genuinely miss him and his performances and his energy. And he, for whatever reason, said yes, and the next thing I know, six days later, we were out of there in 15, 20 minutes and we shot our spot.”

Of course, it didn’t escape the internet’s notice that two well-known Canadian actors were standing in a field, selling a U.S.-only wireless service.

“I would love to see [Mint] in Canada,” Reynolds says. “There’s a Big Three here that’s challenging to crack. I don’t pretend to know the telecom business well enough to say why, how or what the path forward would be there. I see basically a tsunami of feedback from Canada, asking ‘why can’t we have this here?’ I think it’s sexy. It’s pragmatic and sexy. That’s why I got involved with it.”

There’s no ‘hacker house’ geared toward undergraduate women, so they created one of their own

Hacker houses are making a comeback for entrepreneurs as remote work drags on. While founders are adapting to quarantine in style, a group of college women in their 20s aren’t waiting until they are done with undergraduate to plunge into the lifestyle themselves.

Started by college juniors Coco Sack and Kendall Titus, Womxn Ignite is a house for female and non-binary college undergraduates studying computer science. The idea was born out of Sack and Titus’s exhaustion with remote school at Yale and Stanford respectively. After too many boring Zoom lectures, they took gap semesters and searched for a productive way to spend their time off.

“There are a lot of [programs] that target younger women to get them into coding in high school, and there’s a lot of syndicates and founder groups for women late into their careers,” Titus said. “But there was nothing for anyone in the age range of 20 to 25 where you’re trying to find your way, raise your voice, and hold your ground.”

So, they started their own program. The duo rented out a wedding resort space in California and searched for other women who would experiment the lifestyle and take a gap year. As over 40% of students consider a gap year, the demand became apparent very fast: over 500 people applied for a spot in the house, and just 20 were chosen.

Womxn Ignite is organized as a live-in incubator. Participants are sorted into teams based on their interest areas, and are then pushed to solve a certain problem.

To do so, teams go through a variety of mentor sessions. On Mondays, Tuesdays, and Thursdays, Womxn Ignite sets up mentorship sessions from a revolving-base of female entrepreneurs. There are also guest speaker talks sprinkled throughout the week for high-profile entrepreneurs, including Melinda Gates and bumble’s Whitney Wolfe Herde.

At the end of each week, a team gives a presentation on their progress around problem statements, solution, customer validation, and product development.

Titus says that the goal is not for everyone to come out with a company, but instead to leave with more people in your network and ideas on how to approach starting your business. One participant is writing a TV show about being a Black woman in tech; another is creating a company meant to make programs like Womxn Ignite easier to launch at scale.

In between those sessions is largely spent on team-based collaboration and networking. There are themed-dinners and “platonic date nights” where participants are paired up and encouraged to explore the area or do an activity together to get to know one another. On weekends, women are invited to talk about their niche obsessions, whether it’s the ethical concerns of facial recognition or materials at the nanoscale.

Titus and Sack say that they charge no more than $5,000 for entrance into the program, but over half of participants are on scholarships given by unnamed investors.

Diversity of a cohort matters when trying to create a community that will systemically empower women of all backgrounds. Racial diversity of Womxn Ignite ranges from majority white, but is closely met by Black and LatinX, followed by Middle Easter and Asian Indian. The participants came from all top-tier schools, including Stanford, Yale, Georgetown, Columbia, Harvard, Dartmouth and MIT.

A team photo

The community of women, many of whom plan to return to school, aren’t focused on classic accelerator tropes like Demo Days or first checks simply because of the stage of life they are in. Instead, the program ends with an optional-ask: will each participant dedicate 1% of their annual income for the next 5 years into a syndicate fund? So far, most have signed yes, the co-founders said, even though the majority will return to school in some capacity.

The fund will be used to invest in other female founders, and grow as Womxn Ignite members grow in their careers, too.

“That number will hopefully grow,” Titus said. “We’ll have pooled what we can collectively think about how we want to spend and invest to help elevate other female founders like ourselves.”

Clara Schwab, a participant in Womxn Ignite, said that the contract will help women get more involved in venture capital, a male-dominated field, earlier in their careers.

“And I don’t know any other environment or situation in which myself and 19 other really talented and smart and ambitious women who are all interested in tech, we come together and like, discuss such a thing,” she said.

The co-founders plan to host another cohort in February, and then focus on building out a digital community for the participants.

 

 

Bigblue wants to automate e-commerce fulfillment in Europe

Meet Bigblue, a French startup that just raised a $3.6 million seed round (€3 million) to build an end-to-end fulfillment solution in Europe. If you sell products on your own website and across multiple marketplaces, you can use Bigblue to handle everything that happens after a transaction.

Bigblue doesn’t try to reinvent the wheel. Instead, it partners with existing logistics companies so that you only have to manage one relationship with Bigblue. It means that Bigblue works with several fulfillment centers to store your products as well as multiple shipping carriers.

Essentially, Bigblue lets you improve the experience for your customers. When you start using Bigblue, you send your products to a fulfillment center and you integrate Bigblue with your online stores. The startup has integrations with Shopify, WooCommerce, Magento, Wix Store, Prestashop, Fastmag and Amazon’s marketplace.

When a client orders a product from you, it is packed and shipped directly from the fulfillment center to your customers. Bigblue customers pay a flat fee per order and don’t have to deal with anything. Some packages might be delivered through DHL, others might be sent out using Chronopost, etc. It is completely transparent as Bigblue chooses the right carrier for you.

The startup also gives you more visibility into your shipping process. Retailers get an overview of their operations and can see the inventory from Bigblue’s interface. Clients receive branded delivery emails.

While it’s hard to build a good logistics network if you’re a small e-commerce company, Bigblue lets you compete more directly with Amazon big e-commerce websites. You can level up the customer experience without putting together an in-house logistics team.

Samaipata is leading today’s funding round. Bpifrance is contributing to the round. Plug and Play, Clément Benoit, Thibaud Elziere and Olivier Bonnet are also investing.

With the new influx of funding, the startup plans to hire 50 people and improve its product. You can expect more integrations with e-commerce platforms, ERPs and marketplaces. Bigblue is also going to build out its own shipment tracking pages and email personalization toolkit. The company will also improve product returns and delivery ETAs.

Equity Dive: Edtech’s 2020 wakeup call

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

This week, we’re doing a first-ever for the show and taking a deep dive into one specific sector: Edtech.

Natasha Mascarenhas has covered education technology since Stanford first closed down classes in the wake of the coronavirus pandemic. In the wake of the historic shuttering of much of the United States’ traditional institutions of education, the sector has formed new unicorns, attracted record-breaking venture capital totals, and most of all, enjoyed time in a long-overdue spotlight.

For this Equity Dive, we zero into one part of that conversation: Edtech’s impact on higher education. We brought together Udacity co-founder and Kitty Hawk CEO Sebastian Thrun, Eschaton founder and college drop-out Ian Dilick, and Cowboy Ventures investor Jomayra Herrera to answer our biggest questions.

Here’s what we got into:

  • How the state of remote school is leading to gap years among students
  • A framework for how to think of higher education’s main three products (including which is most defensible over time)
  • What learnings we can take from this COVID-19 experiment on remote schooling to apply to the future
  • Why ed-tech is flocking to the notion of life-long learning
  • And the reality of who self-paced learning serves — and who it leaves out

And much, much more. If you celebrate, thank you for spending part of your Thanksgiving with the Equity crew. We’re so thankful to have this platform and audience, and it means a ton that y’all tune in each week.

Finally, if you liked this format and want to see more, feel free to tweet us your thoughts or leave us a review on Apple Podcasts. Talk soon!

Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Enterprise investor Jason Green on SPAC hopefuls versus startups bound for traditional IPOs

Jason Green has a pretty solid reputation as venture capitalists go. The enterprise-focused firm the cofounded 17 years ago, Emergence Capital, has backed Saleforce, Box, and Zoom, among many other companies, and even while every firm is now investing in software-as-a-service startups, his remains a go-to for many top founders selling business products and services.

To learn more about the trends impacting Green’s slice of the investing universe, we talked with him late last week about everything from SPACs to valuations to how the firm differentiates itself from the many rivals with which it’s now competing. Below are some outtakes edited lightly for length.

TC: What do you make of the assessment that SPACs for companies that aren’t generating enough revenue to go public the traditional route?

JG: Well, yeah, it’ll be really interesting. This has been quite a year for SPACs, right? I can’t remember the number, but it’s been something like $50 billion of capital raised this year in SPACs, and all of those have to put that money to work within the next 12 to 18 months or they give it back. So there’s this incredible pent-up demand to find opportunities for those SPACs to convert into companies. And the companies that are at top of the charts, the ones that are the high growth and profitable companies, will probably do a traditional IPO, I would imagine.

So [SPAC candidates are] going to be companies that are growing fast enough to be attractive as a potential public company but not top of the charts. So I do think [sponsors are] going to target companies that are probably either growing slightly slower than the top-quartile public companies but slightly profitable, or companies that are growing faster but still burning a lot of cash and might actually scare all the traditional IPO investors.

TC: Are you having conversations with CEOs about whether or not they should pursue this avenue?

JG:  We just started having those conversations now. There are several companies in the portfolio that will probably be public companies in the next year or two, so it’s definitely an alternative to consider. I would say there’s nothing impending I see in the portfolio. With most entrepreneurs, there’s a little bit of this dream of going public the traditional way, where SPACs tend to be a little bit less exciting from that perspective. So for a company that maybe is thinking about another private round before going public, it’s like a private-plus round. I would say it’s a tweener, so the companies that are considering it are probably ones that are not quite ready to go public yet.

TC: A lot of the SPAC fundraising has seemed like a reaction to uncertainty around when the public window might close. With the election behind us, do you think there’s less uncertainty?

JG: I don’t think risk and uncertainty has decreased since the election.There’s still uncertainty right now politically. The pandemic has reemerged in a significant way, even though we have some really good announcements recently regarding vaccines or potential vaccines. So there’s just a lot there’s a lot of potential directions things could head in.

It’s an environment generally where the public markets tend to gravitate more toward higher-quality opportunities, so fewer companies but higher quality,  and that’s where I think SPACs could play a role. I’d say first half of next year, I could easily see SPACs being the more likely go-to-market for a public company, then the latter half of next year, once the vaccines have kicked in and people feel like we’re returning to somewhat normal, I could see the traditional IPO coming back.

TC: When we sat down in person about a year ago, you said Emergence looks at maybe 1,000 deals a year, does deep due diligence on 25, and funds just a handful or so of these startups every year. How has that changed in 2020?

JG: I would say that over the last five years, we’ve made almost a total transition. Now we’re very much a data-driven, thesis-driven outbound firm, where we’re reaching out to entrepreneurs soon after they’ve started their companies or gotten seed financing. The last three investments that we made were all relationships that [date back] a year to 18 months before we started engaging in the actual financing process with them. I think that’s what’s required to build a relationship and the conviction, because financings are happening so fast.

I think we’re going to actually do more investments this year than we maybe ever done in the history of the firm, which is amazing to me [considering] COVID. I think we’ve really honed our ability to build this pipeline and have conviction, and then in this market environment, Zoom is actually helping expand the landscape that we’re willing to invest in. We’re probably seeing 50% to 100% more companies and trying to whittle them down over time and really focus on the 20 to 25 that we want to dig deep on as a team.

TC: For founders trying to understand your thinking, what’s interesting to you right now?

JG: We tend to focus on three major themes at any one time as a firm, and one we’ve termed ‘coaching networks’. This is this intersection between AI and machine learning and human interaction. Companies like [the sales engagement platform] SalesLoft or [the knowledge management system] Guru or Drishti [which sells video analytics for manual factory assembly lines] fall into this category, where it’s really intelligent software going deep into a specific functional area and unleashing data in a way that’s never been available before.

The second [theme] is going deep into more specific industry verticals. Veeva was the best example of this early on with with healthcare and life sciences, but we now have one called p44 in the transportation space that’s doing incredibly well. Doximity is in the healthcare space and going deep like a LinkedIn for physicians, with some remote health capabilities, as well. And then [lending company] Blend, which is in the financial services area. These companies are taking cloud software and just going deep into the most important problems of their industries.

The third them [centers around] remote work. Zoom, which has obviously has been [among our] best investments is almost as a platform, just like Salesforce became a platform after many years. We just funded a company called ClassEDU, which is a Zoom-specific offering for the education market. Snowflake is becoming a platform. So another opportunity is is not just trying to come up with another collaboration tool, but really going deep into a specific use case or vertical.

TC: What’s a company you’ve missed in recent years and were any lessons learned?

JG: We have our hall of shame. [Laughs.] I do think it’s dangerous to assume that things would have turned out the same if if we had been investors in the company. I believe the kinds of investors you put around the table make a difference in terms of the outcome of your company, so I try not beat myself up too much on the missed opportunities because maybe they found a better fit or a better investor for them to be successful.

But Rob Bernshteyn of Coupa is one where I knew Rob from SuccessFactors [where he was a product marketing VP], and I just always respected and liked him. And we always chasing it on valuation. And I think I think we probably turned it down at an $80 million or $100 million dollar valuation [and it’s valued at] $20 billion today. That can keep you up at night.

Sometimes, in the moment, there are some risks and concerns about the business and there are other people who are willing to be more aggressive and so you lose out on some of those opportunities. The beautiful thing about our business is that it’s not a zero-sum game.

Remote-controlled delivery carts are now working for the local Los Angeles grocer

Robots are no longer the high-tech tools reserved for university labs, e-commerce giants and buzzy Silicon Valley startups. The local grocer now has access too.

Tortoise, the one-year-old Silicon Valley startup known for its remote repositioning electric scooters, has taken its tech and adapted it to delivery carts. The company recently partnered with online grocery platform Self Point to provide neighborhood stores and specialty brand shops with electric carts that — with help from remote teleoperators — deliver goods to local consumers.

The companies have launched the product offering in Los Angeles with three customers. Each customer, which includes Kosher Express, has two to three carts that can be used to make deliveries up to three-mile radius from the store. Unlike the network models used by some autonomous sidewalk delivery companies, grocery stores lease the delivery carts and are responsible for the storage, charging and packing it up with goods that their customers have ordered.

The initial Self Point -Tortoise launch is small. But it has the makings of expanding far beyond Los Angeles. More importantly for Tortoise, it’s a validation of the company’s larger vision to make remote repositioning a horizontal business with numerous applications.

Tortoise started by equipping electric scooters with cameras, electronics and firmware that allow teleoperators in distant locales drive the micromobility devices to a rider or deliver it back to its proper parking spot. Now, it has taken that same hardware and software and used it to build its own delivery cart.

Tortoise co-founder and president Dmitry Shevelenko has said the company’s remote repositioning kit can be used for security and cleaning bots as well as electric wheelchairs and other accessibility devices. He’s even fielded inquiries from farmers interested in using remote repositioning scooters to monitor crops.

“From a practical point of view we’re not trying to not be everywhere overnight, but there’s really no technological constraint for us,” Shevelenko said in a recent interview.

The emergence of COVID-19, and its affects on consumer behavior, prompted Tortoise to home in on delivery carts as its second act.

“We kind of quickly realized that we’re living in a once-in-a-generation change in consumer behavior where now everything is online and people are expecting it to be delivered same day,” Shevelenko said. Tortoise was able to go from the first renderings in May to a delivery cart launch by the fourth quarter because of its ability to repurpose its hardware, software and workforce.

The company still remains bullish on its initial application in micromobility. Earlier this year, Tortoise, GoX and and tech incubator Curiosity Labs launched a six-month pilot in Peachtree Corners, Georgia that allows riders to use an app to hail a scooter. The scooters are outfitted with Tortoise’s tech. Once riders hail the scooter, a Tortoise employee hundreds of miles away remote controls the scooter to the user. After riders complete trips, the scooters drive themselves back to a safe parking spot. From here, GoX employees charge and sanitize the scooters and then mark them with a sticker that indicates they have been properly cleaned.

While partnership with Self Point is Tortoise’s next big project, Shevelenko was quick to note that the company is only focused on one slice of the on-demand delivery pie.

“Low speeds and hot foods don’t work too well,” he said. Startups such as Kiwibot and Starship have smaller robots that focus on that market, Shevelenko added. Tortoise’s delivery carts were designed specifically to hold large amounts of groceries, alcohol and other goods.

“We saw kind of a big opening in grocery,” he said, adding that relying on remote operators and its kit is a low-cost combination that can be used today while automated technology continues to develop. “We’re doing for last-mile delivery what globalized call centers did for customer support.”

Insurtech’s big year gets bigger as Metromile looks to go public

In the wake of insurtech unicorn Root’s IPO, it felt safe to say that the big transactions for the insurance technology startup space were done for the year.

After all, 2020 had been a big one for the broad category, with insurtech marketplaces raising lots, rental insurance startup Lemonade going public, Root itself debuting even more recently on the back of its automotive insurance business, a big round to help Hippo keep building its homeowners company, and more.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


But yesterday brought with it even more news: Metromile, a startup competing in the auto insurance market, is going public via a blank-check company (SPAC), and Hippo raised a huge, unpriced round.

So let’s talk about why Metromile might be plying the public markets, and why Hippo may have have decided to pick up more cash. Hint: The reasons are related.

A market hungry for growth

The Lemonade IPO was a key moment for neo-insurance startups, a key part of the broader insurtech space. When the rental insurance provider went public, it helped set the tone for public exit valuations for companies of its type: fast-growing insurance companies with slick consumer brands, improving economics, a tech twist and stiff losses.

For the Roots and Metromiles and Hippos, it was an important moment.

So, when Lemonade raised its IPO range, and then traded sharply higher after its debut, it boded well for its private comps. Not that rental insurance and auto insurance or homeowners insurance are the same thing. They very most decidedly are not, but Lemonade’s IPO demonstrated that private investors were correct bet generally on the collection of startups, because when they reached IPO-scale, they had something that public investors wanted.

Slack’s stock climbs on possible Salesforce acquisition

News that Salesforce is interested in buying Slack, the popular workplace chat company, sent shares of the smaller firm sharply higher today.

Slack shares are up just under 25% at the moment, according to Yahoo Finance data. Slack is worth $36.95 per share as of the time of writing, valuing it at around $20.8 billion. The well-known former unicorn has been worth as little as $15.10 per share inside the last year, and worth as much as $40.07.

Inversely, shares of Salesforce are trading lower on the news, falling around 3.5% as of the time of writing; investors in the San Francisco-based SaaS pioneer were either unimpressed at the combination idea, or perhaps worried about the price that would be required to bring the 2019 IPO into their fold.

Why Salesforce, a massive software company with a strong position in the CRM market, and aspirations of becoming an even larger platform player, would want to buy Slack is not immediately clear.

There are possible synergies between the two companies, including the possibility of cross-selling the two companies products’ into each others customer basis, possible unlocking growth for both parties; Slack has wide marketshare inside of fast-growing startups, for example, while Salesforce’s products roost inside a host of megacorps.

TechCrunch has reached out to Salesforce, Slack, and Slack’s CEO for comment on the deal’s possibility. We’re not expecting much back, but we’ll update this post with whatever we get.

While Salesforce bought Quip for $750 million in 2016, which gave it a kind of document sharing and collaboration, other than that, Salesforce Chatter has been the only social tool in the company’s arsenal. Buying Slack would give the CRM giant solid enterprise chat footing and likely a lot of synergy among customers and tooling.

But Slack has always been more than a mere chat client. It enables companies to embed workflows, and this would fit well in the Salesforce family of products, which spans sales, service, marketing and more. It would allow companies to work both inside and outside the Salesforce ecosystem, building smooth and integrated workflows. While it can theoretically do that now, if the two were combined, you can be sure the integrations would be much tighter.

Slack has come under withering fire from Microsoft in recent quarters, as the Redmond-based software giant poured resources into its competing Teams service. Teams challenges Slack’s chat tooling, and Zoom’s video features, and has seen huge customer growth in recent quarters.

Finding Slack a corporate home amongst the larger tech players could ensure that Microsoft doesn’t grind it under the bulk of its enterprise software sales leviathan. And Salesforce, a sometimes Microsoft ally, would not mind adding the faster-growing slack to its own expanding software incomes.

The question at this juncture comes down to price. Slack investors won’t want to sell for less than a good premium on the pre-pop per-share price now feels rather dated.

Join us for a live Q&A with Sapphire’s Jai Das on Tuesday at 2 pm ET/11 am PT

Sure, we’re heading into a holiday weekend here in America, but that doesn’t mean that the good ship TechCrunch is going to slow down. We’re diving right back in next week with another installment in season two of Extra Crunch Live, our regular interview series with startup founders, venture capitalists, and other leaders from the technology community.

This series is for Extra Crunch members, so if you haven’t signed up you can hop on that train right here.

Next week I’m virtually sitting down with Jai Das, a well-known managing director at Sapphire Ventures.

Das as invested in companies like MuleSoft (sold for $6.5 billion), Alteryx (now public), Square (also public), Sumo Logic (yep, public) while at Sapphire, having previously worked corporate venture jobs at Intel Capital and Agilent Ventures. (Sapphire was itself originally SAP’s corporate venture capital arm, but it split off from its parent in 2011, rebranded, and kept on raising funds.)

Here are notes from the last episode of Extra Crunch Live with Bessemer’s Byron Deeter.

It’s going to be fun as there’s so much to talk about. I’m still bubbling up my question list, so to avoid giving the Sapphire PR team too much pre-discussion ammo let’s just say that corporate venture capital’s place in the 2020 boom is an interesting topic for both founders, and investors alike.

And I’ll want to press Das on the current market for software startups, where we are in the historical arc of SaaS multiples, the importance of API-led tech upstarts, where founders might look to build the next great enterprise startup, and if there are any new platforms bubbling up that could be a foundation for future founders to later leverage.

As this is an Extra Crunch Live, I’ll also work in a few questions from the audience (that means you, make sure you Extra Crunch subscription is live), to augment my own clipboard of notes.

This is going to be a good one. I’ll see you next Tuesday for the show.

Details

Below are links to add the event to your calendar and to save the Zoom link. We’ll share the YouTube link shortly before the discussion: