$450M for Noname, two billion-dollar rounds, and good news for crypto startups

Good news, crypto founders: Venture capital activity is picking up in your sector after falling to multi-year lows in late 2023. Put another way, venture folks appear more web3-bullish than before, even if recent tallies are far under highs seen in late 2021. But that was hardly the only news item we had to dig into on Equity this morning. Akamai is spending $450 million for API security firm Noname, a deal that TechCrunch previously reported was looking to get done at around $500 million. The transaction, notable for its size, is also worth considering given that Noname was valued at a unicorn price tag back in 2021. Wiz is another name in the cybersecurity space that could do deals, thanks to a recent $1 billion fundraise. It intends to buy both wounded unicorns and hot, smaller startups to bolster its business. The company is now valued at $12 billion, which is a lot. (Wayve also raised north of $1 billion, but is focused on the self-driving space instead of security.) We also saw Monzo snag $190 million more, bringing its full-year fundraising score to more than $600 million as TikTok fights a ban, and Oyo tries to raise new capital at a fraction of its prior worth. And to close, Haje is bringing Pitch Deck Teardown to Equity! If you have not read the series — start here — you are in for a treat. We're kicking the new segment off with a look at NOQX's deck, what worked, what didn't, and what's next. Chat Friday! Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday. 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 episode transcript, for those who prefer reading over listening, 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 8, 2024. Welcome back my friends to our Wednesday show where we dig into the critical startup and venture capital stories from the week thus far. Before we get into the show rundown though, a note, I woke up with a very sore throat this morning, which happens when you have a small child, but if I sound lethargic or cranky, I'm not. I am merely in pain. So no worries there. All is well. On the show this morning, we have good news for the world of crypto venture capital, then a big deal in the world of cybersecurity, a couple of $1 billion

• 0:53Speaker 00

  funding rounds, the latest from Monzo, and then to wrap us up, a new segment, Pitch Deck teardown, hosted by our very own HiComms. All right, let's go.

• 1:06Speaker 00

  Starting off with some good news this morning, the pace at which venture capitalists are putting money into startups in the crypto world is picking up. So after rising from a multi-year low of $1.2 billion back in Q4 of 2023, crypto startup fundraising bounced back to $1.7 billion in the first quarter. And Crunchbase data indicates that the sector could do even better in the second quarter. That is underscored by a recent report from CoinMarketCap. They say that in April, crypto startups raised $1.02 billion across 161 investment rounds. Now, that was actually a little bit

• 1:47Speaker 00

  down from what was seen in March when $1.09 billion was raised by the same cohort of startups. That said, yes, it was down, but CoinMarketCap says, and I quote, "It was the first time since October, November 2022 that the crypto industry has experienced two consecutive months of funding surpassing the $1 billion mark."

• 2:10Speaker 00

  And Crunchbase agrees its Q2 data point for crypto startups is already at 1.2 billion. So what to make of all that? I think it means that Web3 funding is finally regaining its footing. That said, while it is good that venture investment into crypto startups is on the rise, it remains miles and miles beneath the $10-plus billion that Web3 startups raised per quarter back in late '21 and early '22. So if you want to think about it another way, it's not that hard to post impressive gains. If you've already seen most of your volume evaporate. That said, for Web3 founders, good news is just that. Good news.

• 2:53Speaker 00

  Moving on to startup news. A couple of weeks ago, TechCrunch broke the story that public cybersecurity company Akamai was in discussions to acquire No Name Security. It's a startup that works in the API security place, and the deal was supposed to be around $500 million. The deal has since been confirmed, though, at a lower price. So Akamai on Tuesday said that it has agreed to buy No Name in a $450 million deal. I think this transaction underscores an ongoing push for consolidation inside the cybersecurity market, and that just makes good sense. Point solutions are lovely and important for many things, but in a market of myriad cyber threats, full packages probably make more sense.

• 3:38Speaker 00

  Now, the reason why this deal matters, apart from being a nine-figure transaction, is that No Name was valued at $1 billion during its last fundraise in December of 2021. So it's selling for less than half that price tag. This is therefore a good data point for what might happen to many unicorns that raised at $1 billion or more during the last venture boom and are now facing a much more conservative valuation market. Now, Akamai said that the deal will deliver about $20 million in revenue during its fiscal year. You can kind of run the math there on the revenue multiple, but it seems that the $450 million price tag was more merciful than mercenary and that this deal's dollar amount makes reasonable sense.

• 4:24Speaker 00

  It's buy one, get one day here at Equity. And by that, I mean, if you buy $1 billion deal, you get two, because we have two. The first one comes from Wiz. It is a startup that is building an all-in-one cloud security platform. Going back to our previous discussion about point solutions versus more broad offerings. And thanks to a new funding round, it is on an acquisition march to expand ahead of an eventual IPO. Now, the company just raised $1 billion to help make all those deals in the form of a Series E that was co-led by Andreessen Horowitz, Lightspeed and Thrive. Sure, three leads is a bit much, but it's hard to add up to $1 billion. It's a lot of checks, so I'm not worried about it.

• 5:07Speaker 00

  The new Series E values Wiz at $12 billion, making it one of the most highly valued startups, or really just companies, period, in cybersecurity today. Now, the New York-based startup does want to go out there and try to buy two different types of companies for its acquisition push, one of which are ex-unicorns. This is where the preceding Akamai deal, I think, really tells us what to expect in the future. And then also, quote, "younger startups, superstars with a great trajectory ahead of them, according to the company." More money, more deals. I love to see it. Let's see what Wiz buys next. Then, for our second billion-dollar deal, there is WAVE, W-A-Y-V-E, which is a UK-born startup that is developing self-learning

• 5:52Speaker 00

  rather than rule-based systems for autonomous driving. That work helped it close $1.05 billion in a Series C, notably, that was led by SoftBank Group. Now, TechCrunch writes that WAVE's approach to autonomous driving is actually very similar to Tesla's. But unlike Elon Musk's EV company, WAVE plans to sell its tech to other OEMs instead of building cars itself. Two big billion-dollar deals in one week. I love to see it.

• 6:24Speaker 00

  Enough cybersecurity news. Let's talk about fintech because CNBC reports that Monzo has raised $190 million more, and that means that the British neo-bank has now raised north of $600 million this year. Now, in valuation terms, Monzo is now worth 5.2 billion instead of its preceding 5 billion, presumably, as long as I'm doing the math right, early this morning, this was a deal at a flat pre-money valuation to its preceding 2024 capital injections. All right, so lots of cash in hand. What is ahead for the company? CNBC cites international expansion, getting into pensions, and expanding its feature offerings more broadly. Surely,

• 7:07Speaker 00

  it can afford to do all three of those at once. Now, do recall that we have seen some neo-banks report improved financial results in the last couple of years, including Monzo, a company that tried the US market and pulled back, but also reached cash flow positivity and profitability back in 2023. So now with more cash in the bank, it can expand its overall feature limit, and perhaps even take another run at several international markets.

• 7:36Speaker 00

  A couple of short stories that I'm going to squeeze in here before we get to the pitch deck teardown. First of all, TikTok is suing the US government because it wants to block a law that would ban the social media service in the US if its parent company ByteDance fails to sell it within a year. So I went ahead and I read bits of this lawsuit. I didn't get to read the whole thing. Time is short, but TikTok argued inside of it that, quote, "The Chinese government has made it clear that it would not permit a divestment of the recommendation engine that is a key to the success of TikTok in the United States." And if you're trying to make the point that you are an independent company from your Chinese parent company,

• 8:17Speaker 00

  and then you write that the Chinese government is in charge of this, well, it kind of makes the law's point. Moving on, oyoh. Do you recall the Indian budget chain startup that raised all that money years ago and saw its valuation scale to $10 billion? Well, according to three sources talking to TechCrunch, it's raising more money, but at a valuation of $3 billion or less. Now, $3 billion is still $3 billion more than I have, so far from it that I'm going to look down at that number. But at the same time, if you're measuring down from 10, 3 just isn't that much.

• 8:56Speaker 00

  All right, we're shaking up equity by adding a segment. We're talking about pitch deck teardowns. Yes, we are going to bring that TechCrunch series to your ears, learning what VCs do and do not want from TechCrunch's very own venture capital whisper, Haya Camps. I have had the absolute pleasure of working with Haya a ton over the years. He is smart, he is witty, he is knowledgeable, he frickin' loves pitch decks, and founders adore hearing him talk about what works and what doesn't. So I'll let Haya introduce himself, but I can't wait to hear this. Haya, take it away.

• 9:30Speaker 01

  Thank you, Alex. For those of you who are not familiar with me, I am Haya Camps, and I've been around the block a few times here at TechCrunch before. I joined the first time back in 2016, and I've written more than 1,000 articles for TechCrunch since then. So I have a broadcast journalism degree, and I love radio, so it's super fun to be back on the podcast. And I've started a bunch of companies over the years, so I've really done the entrepreneur journey myself. I did a hardware company, I've done a B2B SaaS company, I've done several B2C software companies. And, you know, some of them had some venture backing, some of them were bootstrapped, and some of them were utter and complete failures. But that's how you learn, right? I went through a couple of accelerators and learned a lot from that as well. Here in San Francisco, I ended up being the director of portfolio at a VC firm.

• 10:14Speaker 01

  And I'll tell you what, seeing the good, the bad, and the ugly from the inside for about 100 startups is a hell of a way to learn everything there is to know about startups. During the pandemic, I started working as a pitch coach. I wrote a couple of books about how to pitch. One is called Pitch Perfect, and the other one is called Pitch Guide. And on TC Plus, I've written extensively about how investors think when they're trying to invest in early-stage startups. One of the things I'm best known for here at TechCrunch is the Pitch Deck teardown series. Basically, we take a pitch deck and we review it. I've done 93 so far, probably 94 by the time this goes on air, and those pitch decks have raised 1.4 billion dollars in total. The concept for the Pitch Deck teardowns is pretty simple.

• 10:57Speaker 01

  It's three things that worked and three things you can improve. I love being able to show examples of pitch decks out in the wild that were really successful, but it's also good to remind yourself that a lot of founders don't fully understand how VCs think and what you need to focus on in order to successfully raise money. You can always get the full Pitch Deck teardowns and the pitch decks themselves on TechCrunch, but we figured it would be fun to highlight some of the learnings that we've had over the years here on Equity. So, the last Pitch Deck teardown that I published was the NoQX Pitch Deck. The company is a Stockholm-based startup that helps companies improve their goal-setting using collaborative mechanisms and experiences for building better companies. This is a very small round. They only raised 200,000 dollars.

• 11:41Speaker 01

  So it's a pre-seed deck, it's kind of a friends and family deck, which is essentially what in the valley they would call a party round, right? You get a bunch of people together, they all throw some money in the ring, and call it a day. Now, the Pitch Deck has 18 slides, and 18 slides may not sound like a lot, but most startups do just fine with just 16 slides. Get to the point, tell the story you need to tell, and get out. The Pitch Deck doesn't have to tell the full story of what you're trying to do, it just has to kind of frame the conversation you're about to have at an investor. And for most people, 16 slides does that really well. Now, NoQX was actually really interesting. They're kind of a bit of an outlier in that the structure I usually follow, the three good slides and the three things you could improve, didn't really work for this one.

• 12:26Speaker 01

  It turns out even the good slides had some issues, and it was nothing I like full-throatedly loved about this Pitch Deck. But it still means that you can learn a lot from it. So let me take a look at some of the things we did learn. A few quick tips. You absolutely don't need three problem slides. If you need three slides to explain what the problem is, it either means that as a founder, you don't fully have a good grasp of what the problem is, or you need to do a little bit more work on figuring out, okay, how do you highlight the problem that this company is solving in a much simpler way? And especially for a pre-seed deck, right? If you have to convince somebody that this is a problem worth solving, it may not be a problem worth solving, right? Don't over-index on that.

• 13:08Speaker 01

  Another thing that came up in this deck is that the traction needs to be real traction. Now, if you're raising a pre-seed round, honestly, you probably don't have revenue yet. But for most companies, your traction is your revenue. Like, how much money you're making, how quickly is that growing? I like to think of fundraising as a staged de-risking process. And what I mean by that is like, for every stage of fundraising, the company becomes less risky, becomes more valuable, becomes more interesting to investors. But with lower risk comes lower reward, right? Nonetheless, people will want to understand what is risky about your company? And what have you done so far to reduce that risk? And so, for every company, like, you've done something.

• 13:52Speaker 01

  Maybe all you've done is assembled an incredible team, but that is enough, that in itself de-risks the company. Other ways you could de-risk it is maybe you've spoken to a bunch of customers. Maybe you've built a prototype. Maybe you've solved a hard part of the technological challenge. Or maybe you've got a pattern. Like, think about all the things you've done so far in this business, and how that can be told as a story for how your company is less risky now than it was three, or six, or 12 months ago. That is traction. So tell the story about your traction, or about your de-risking. The final thing that I really struggled with with the Nokia X deck was the team slide. Especially in the earliest stages, all the company has to go on is your team.

• 14:34Speaker 01

  So you've got to explain, why do you have extraordinary founder market fit? Why does your set of founders have a perfect match with the market you're about to go into? Now, that could mean a number of things. Maybe you have an incredible Rolodex of potential customers. Maybe you have enormous experience in building products in this space. Or maybe there's something else about your team that makes an investor go, "Holy crap, this is a problem worth solving, and these are the people to do it." Now, if you're not able to tell that story... I mean, my recommendation would be to think about, are you really the right people to start this company? Probably talk about that a little bit more in the future, but keep that in the back of your mind. The question that you're trying to answer is,

• 15:14Speaker 01

  why is your team going to win? And the NoQX slide, you know, they have a lovely team, as far as I can tell, but there's nothing that jumps out at me and goes, "Reach for your wallet. This is worth investing." So just to recap, you don't need three problem slides. Keep it simple. Traction needs to be real traction. So think about what that means. And you've got to explain why your team is going to win over every other team trying to solve this problem. There's that and a bunch more in the full Pitch Deck teardown of NoQX. Check it out on TechCrunch and we'll include a link in the show notes. All right. If you want to submit your own deck to Pitch Deck teardown, go to any of the Pitch Deck teardowns on TechCrunch and follow the "Submit Your Deck" link. You can

• 15:56Speaker 01

  find me online on Twitter at Hae, that's H-A-E, and I'll be spending a lot of time with you here on Equity, so make sure to subscribe to the podcast wherever you get your podcasts. Don't forget to follow EquityPod on Twitter as well, and I'll see you soon.

• 16:13Speaker 00

  Equity is hosted by myself, Alex Wilhelm, and TechCrunch senior reporter, Mary Ann Azevedo. We are produced by Teresa Loconsolo with editing by Kell. 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.