A new venture capital supergroup is forming

Startups are not shying away from big projects. That’s my takeaway from news that The Browser Company’s Arc browser is now generally available for Windows users, just as Island raised a massive grip of capital for its enterprise-focused browser tool. It’s very encouraging to see startups going after core pieces of technology, and not just the apps that sit atop platforms. Of course, Chromium still reigns supreme, but unseating that horse might take a while. Elsewhere in startup-land this week on Equity, we dug into the Chowdeck round. It’s a Nigerian company that is putting up impressive growth with its food delivery business. Keep an eye on it, Nigeria is a big market and TechCrunch writes that no single company has its delivery business on lock. Yet, at least. On this morning’s episode we also took a look at the recent Corelight round, which given its valuation and revenue growth, is one to chew on. From the venture side of things, we discussed two stories. First, that Intuition is going after the consumer market. From Paris, the smaller fund is betting that going the opposite direction as most VCs is how to make the most money. And second, a new venture capital supergroup is forming. Axios reports that investors with backgrounds at a16z, Bessemer and Index are building a new firm. Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday, and you can subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. You also can follow Equity on X and Threads, at @EquityPod. For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast. Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:10Speaker 00

  Hello and welcome back to Equity, the TechCrunch podcast, where we unpack the numbers and the nuance behind the headlines. This is Alex and today is May 1st, 2024. Welcome back to our Wednesday show where we dig into the critical startup and venture capital stories from the week thus far. And this has been a very busy one. So on the show today for you, my friends, I have browser startups that are big business and what they share, Corelight's latest funding round and why it is a sign of the times, Chowdeck, a startup to watch from Nigeria that has very impressive growth. And then over in the venture category, a new fund with a focused twist and the latest venture supergroup to join together to build something new. It's going to be a blast. Let's go.

• 0:58Speaker 00

  First up, a pair of startup stories that are all about browsers. As it turns out, browsers are big business and given that I have long thought that Chrome needs more competition, good. So let's start with the consumer side of things. The browser company, which makes the Arc web browser, it dropped its Windows version this week. Now you might recall that the browser company was testing its Windows client back in December. It ended up picking up about 150,000 people that used it. And now its waitlist of more than a million can now jump on it and give it a try themselves. The startup does want to replace your kind of daily driver browser. And as TechCrunch writes, recently raised 50 million at a $550 million valuation. I have Arc installed.

• 1:43Speaker 00

  I have played with it a little bit, but I haven't given it really enough time. So I don't have a comment about how good it is, but I will say that 150,000 users and a million people on a waitlist does indicate that the browser company is making something people want. Now pivot, let's talk about the enterprise and a company called Island. They're making a browser for businesses and Ron Miller writes for TechCrunch, quote, "They may be the most valuable..." Startup you have never heard of. Now, the company just announced a $175 million Series D that pushes its valuation up to $3 billion. The company has actually now

• 2:22Speaker 00

  raised a total of $487 million. That's a lot of money. So it got us wondering, what is the company doing that warrants that level of investment and that price? So we asked, and Doug Leon, a partner over at Sequoia, who has put money into Island going all the way back to its Series A, says that he was attracted to the company's founding team, unsurprising, and also its value proposition. So what is that? What is Island building that is so interesting? Leon told TechCrunch that the company, quote, "had a vision that if you could produce a browser based on Chromium that looks like a standard browser to the consumer employee in a corporation, but was secure, it would stop bad guys from doing a whole bunch

• 3:06Speaker 00

  of things." Given that I can't write TechCrunch AM without discussing like three or four cyber breaches, it seems lately, yeah, I can kind of understand that. People want a browser that works, companies want to be secure. If you can do both, why wouldn't that be a big deal? But while these browsers will both challenge Chrome, they are only going to do it from such a distance because they're both based on Chromium, which is software that has an open source element and is supported by Google and also fits into Chrome. So sure, new browsers, woo-hoo, competition, woo-hoo, but Chromium still reigns absolutely supreme.

• 3:45Speaker 00

  All right, let's talk about a big cybersecurity round that I think tells us quite a lot about the state of the market today. So Bloomberg reports that Corelight, a cybersecurity company, unsurprising, has raised $150 million in a Series E. So that is super, super, super duper late-stage money. Excel led, and Corelight is now worth $900 million. What is the revenue base that supports that valuation? Bloomberg notes that the company is heading towards $100 million worth of annual recurring revenue, or ARR, in the next couple of months. So let's just say $100 million. Arr by the middle of the year. That means that today Corelight got a little bit more than a nine X ARR multiple in the round. And that leaves us with, I think, a question.

• 4:30Speaker 00

  So how fast is this company growing? Because if it is growing quickly, then we are seeing late-stage venture capital valuing companies very much like they are essentially public. So that really lowers the stay-private premium, right? I think so. Anyways, Corelight is nearly IPO size and that means that it could list in the next 12 to 24 months if it wanted to. But given market norms, I presume that we will see Corelight file its S1 sometime in 2050.

• 5:02Speaker 00

  Changing topics, changing geographies. I want to talk about a company called Chowdeck. It's based over in Lagos. It's backed by YC. I have heard about it for some time and the company has raised $2.5 million worth of seed capital. So what is Chowdeck doing? It's taking on Nigeria's food delivery market, which TechCrunch reports could reach $2 to $3 billion in value by 2032. So a quickly growing market, clearly Nigeria is a highly populated country, which means that Chowdeck is growing pretty darn quickly. Since launching back in 2021, the platform has seen pretty darn quick growth, now has more than 3,000 delivery riders and over a half million users.

• 5:43Speaker 00

  And the company says that of that number, about 100,000 are active each month on the platform. That adds up to rather tasty growth. The company saw GMV or gross merchandise value of over $7 billion Nigerian naira last year. That's about 5.8 million USD. Then last October, the company reached a milestone, seeing $1 billion Nigerian naira or about $830,000 worth of GMV in one month for the first time. But by this March, which was not that long ago, the company had doubled that figure, cresting more than 2.4 billion Nigerian naira or about $2 million worth of GMV. All of that's cool. Growth is good, but one thing we have seen amongst

• 6:26Speaker 00

  delivery companies in general is exceptionally high burn. The cool thing here is the company in this case says, hey, look, we took it slow. We worked on our model. We got the economics right and now we're scaling. So in theory, ChaoDex shouldn't have the same historical burn rates that we have seen from some of its peers in other countries. If it can keep this low burn, high growth model going, it's going to be worth a lot of money. I dig it.

• 6:52Speaker 00

  Put the startups down. Let's talk about venture capital. I have two funds for you this morning. And the first one is an interesting twist on where everyone is putting capital today. And by twist, I mean absolute diametric opposite. So in 2024, you and I both know it is very hard to wake up without reading about yet another large funding round for an enterprise AI company, or as we saw above, an enterprise cybersecurity company. Intuition, however, is a new venture capital firm based over in Paris that wants to do something a little bit radical by not betting on the enterprise and instead betting on consumer tech exclusively. And that model, that thesis, that bet, that wager, that gambit,

• 7:35Speaker 00

  has seen the firm raise an initial fund of 15 million euro. That works out to about 16 million USD if you want to run the exchange rate. And unsurprisingly, the company has already done a couple of deals after its first close, but is still raising more capital. Again, it's only 15 million euros so far, so I'm not shocked that it's still raising, nor am I shocked that after a first close, a venture capitalist got to work. They tend to do that. Now, the thesis Techwinch writes for Intuition is incredibly simple. And it goes like this. There is a lack of consumer tech investment right now. Yep, I think we can all kind of agree on that. That makes a lot of sense. And yes, we all know that investing in consumer is very, very hard because consumers are fickle, fads are quick, et cetera, et cetera, et cetera.

• 8:19Speaker 00

  But if everyone's going to bet on the enterprise, it's going to be very expensive over there and hard to get into good deals. On the other hand, it means probably that consumer tech startups are cheaper and easier to get money into. That's why I love a counter narrative bet. That's why intuition is interesting. It's bold and good fun. Let's see how the returns work out.

• 8:43Speaker 00

  And to close out today, I have a new supergroup for you. And no, they won't be playing guitar. Instead, they're just going to be making a new firm. But Axios reports that Ethan Kurzweil of Bessemer Venture Partners, Christina Shen, previously of Andreessen Horowitz, and Mark Goldberg, who's known for his time at Index Ventures, are going to form a new firm. And Axios's Kia Kokolichova reports that the three do have a lot of board overlap. So this is not a random group. These are people who have worked together before. I think the timing here is smart. Sure, it's definitely harder to raise a new fund these days. But if you really want to generate straight up bonkers returns, well, you probably want to invest when prices are low. And today, as we saw with

• 9:27Speaker 00

  Core Light's round, they are, at least compared to 2021, in startup land. So if you're a VC and you want to go off on your own, found something new now, make a lot of lower price deals, and then when things perk back up in valuation terms, you look like a genius, you bank the carry, you buy the boat, and you retire to Twitter to shitpost until the very end of time.

• 9:50Speaker 00

  All right, friends, that is our show for this excellent Wednesday morning. Of course, Equity will be back on Friday with our news roundup. Until then, though, we are EquityPod over on X and Threads, TechCrunch Pods over on TikTok. We have a sister show, Found. You look amazing. I will talk to you soon. Goodbye.

• 10:08Speaker 00

  Equity is hosted by myself, Alex Wilhelm, and TechCrunch senior reporter, Mary Ann Azvedo. We are produced by Teresa Loconsolo with editing by Kel. Bryce Durbin is our illustrator. And a big thank you to the audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thank you so much for listening, and we'll talk to you next time.