Equity Monday: Crypto's awful weekend, Apple v. Epic, and funding rounds galore

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here. After a somewhat quiet weekend, things are kicking off in rapid-fire fashion this week. Here's what you need to know: The cryptocurrency selloff that was in full-swing on Friday continued over the weekend. Though bitcoin and ether managed to recoup some of their losses since they set new local minima, the value of popular cryptos is vastly depressed compared to recent highs. Looking ahead, it's the final day of arguments at the Epic Games vs. Apple trial. And we're seeing a smaller company try to crack some of the hold that a major tech incumbent enjoys over a huge piece of the digital economy. So, if you like startups, you might want to put aside your Apple fandom for a minute. More than a few funding rounds are cracking off this morning, including neat rounds from African fintech Mono, India-and-UAE-based Zeta, Emitwise raising $3.2 million, and Aurora Solar raising $250 million. With a busy funding market and a yet-busy IPO cycle, it should be yet another busy week. Strap in! 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

• 0:00Speaker 00

  Equity is brought to you by Extra Crunch, that prodigious tech ranch paywall you keep running into. You can break through that paywall at a steep discount if you use the promo code EQUITY. If you do, you'll get access to our best stuff and you'll make Equity look really good internally at the same time. Enough of that, let's start the show.

• 0:25Speaker 00

  Good morning and welcome to Equity's Monday episode, our weekly primer. Where we catch up on the news and as always, explore the numbers behind the headlines. Today is May 24th and it is going to be one hell of a week. So strap in and let's go.

• 0:43Speaker 00

  All right, we're going to kick off as always with a look back at the weekend. It was a somewhat quiet period from a startup perspective. No company announced a multi-billion dollar deal for an upstart tech company that you've heard of, you know, that sort of thing. But in the world of cryptocurrencies, it really was anything but quiet. A sell-off that was still keeping the market's attention on Friday, lengthened into the weekend with Bitcoin bottoming out around 32,500 ish on Sunday. Ethereum itself saw its own coin fall to around 1,900 over the same timeframe. Now, since then, things have gotten better with Bitcoin rebounding to around 37,500 and Ether to around 2,350. And keep in mind that, you know, you're going to hear this an hour after I finish recording it. So if those numbers change, don't bite me.

• 1:28Speaker 00

  It's just, that's how cryptos go anyways. Both coins remained far, far below their all-time highs they set very recently. Of course Bitcoin spiked to above 64,000 and Ether cracked about 4,300 before losing more than half its value. So it's been rough, you know, it was a rough weekend. Why do we care? Well, we care because the crypto-focused portion of the venture capital world is not getting smaller over time. There's more and more capital going into these companies, it seems. And also, you know, kind of critically, the number of tech companies, both startup and mature in general, that generate at least some revenues from Bitcoin and the broader crypto world is going up. That means we're talking about Robinhood, not just Coinbase and Square, not just. That sort of thing.

• 2:11Speaker 00

  The increasing horizontalness essentially of fintech means that the number of companies with at least a toe in the crypto market is larger than ever. And as we know that trading volumes in the crypto market tend to follow price changes, seeing such sharp declines is not good for more companies than you'd probably think. Now, in kind of response to what I just said, Coinbase stock, of course, is up 3% in pre-market trading. So, you know, 2021, things don't make sense. Take everything with a grain of salt.

• 2:40Speaker 00

  All right, this morning, now, a couple of things have happened that really do matter. So I'm going to blast through these to get you caught up. A Japanese dating app was hacked, Pinterest got the Wall Street Journal to write about its use of artificial intelligence to drive growth, and TechCrunch has one zillion pieces up on new funding rounds to kick off the week. But honestly, forget all that. What matters today is that the Epic Games slash Apple trial goes into its final day of arguing today. Now, we're not going to see a verdict this afternoon, but the company's closing arguments will be heard along with what I think is going to be some cross-examination. The lawsuit pitting Epic Games and its view that Apple overtaxes its mobile application store against Apple itself, a classic tech incumbent stuck in the belief that it deserves a fat chunk of everyone else's incomes, is a David versus Goliath story.

• 3:25Speaker 00

  Sure, but it's also a lot more than that. It's the pitting of a games company probably better known by Apple's fans' children than your average Apple hardware dork, and the entire legal brouhaha was kicked off by Epic Games deliberately picking a fight with Apple over its grievances, something that, you know, nearly every mobile developer that you're personally friends with will not discuss out loud with you unless you promise to keep quiet and not tell Apple about it. Sure, you can point out that Epic Games was deliberately provocative, but before you choose Apple's side, remind yourself that tech upstarts are how the tech industry keeps itself fresh, and incumbents are the rich targets for material disruption. Just because you love your iPhone doesn't mean that you have to pledge allegiance to Tim Cook's huge cut of App Store incomes. And, you know, frankly, if you do favor Epic Games,

• 4:09Speaker 00

  cool, but that doesn't mean that Fortnite is really that good of a game, because it isn't. But we have to give its creator three middle fingers out of four for forcing the issue of locked app stores run by companies who also sell the OS they rest upon, and how much power those mega corps can arrogate to themselves over the long haul. So sure, Fortnite, eh, but Epic Games' overall move, all right, cool.

• 4:34Speaker 00

  All right, funding rounds. Ladies and gentlemen, we have a lot to get through. So we're going to be super brief. If you want more, of course, techcrunch.com, we have all of these in detail and a lot more. So what follows are a couple of my favorite rounds from this morning to kick your week off. All right. First up, Nigerian fintech startup Mono has raised a $2 million round. According to our own reporter, Tej Kene Okofor, Mono was building the plaid for Africa. It's pivoted. Now it's quote, "trying to improve financial inclusion and connectivity on the continent." I read that shift as Mono going one step earlier in the process of building kind of fintech infra for a continent that is seeing rising venture capital totals, internet penetration, and of course, startup activity. Very cool. Sticking to the fintech theme this morning, TechCrunch's Manish Singh wrote

• 5:18Speaker 00

  about Zeta, the Z-E-T-A, a quote, "startup that helps banks and fintech firms launch products." It has offices in both India and the UAE, and this is amazing, it raised a quarter billion dollars at a $1.45 billion valuation. So Zeta, welcome to the unicorn holding pen. And lots more has happened, including Immitwise raising 3.2 million for its greenhouse gas measuring tech, Aurora Solar raising a quarter million dollars in a huge Series C, and more. Look, my read is this, expect funding to stay rapid fire for the rest of the month. It's going to be busy.

• 5:54Speaker 00

  All right, now I am really short on word count this morning. So let me just close out with a couple of notes on SPACs. I spent some time this weekend thinking about the public markets, you know, as always, but couldn't get the thought of how much crap is being SPACed into the hands of retail traders lately out of my head. Now, as Heather Somerville reported for the Wall Street Journal yesterday, "Many post-combination SPACs are seeing their share prices decline, and that means that the method of going public via one of these blank check companies is becoming less and less appealing, except for companies, of course, for whom there is no other choice." That may mean that in time, the only companies really pursuing new SPAC deals are the most desperate, and as SPACs themselves see their countdown clocks keep ticking, we could see a two-horse race to the bottom. Something to think about.

• 6:41Speaker 00

  All right, closing today, a brief reminder that you can follow Equity on Twitter at EquityPod. I post under the handle at Alex and this podcast is back on Wednesday with a whole lot more. Hugs from the Equity team to you. May your week be full of warmth and sun and you kick ass. All right, bye.