Equity Monday: Hacks, IPOs, and the next generation of American tech giants

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. I also tweet. It's a surreal day to talk about technology, but here we are. If you can pull your eyes away from the greater geopolitical tragedy that is our world today, here's what we talked about: T Mobile may have suffered a material breach. If this bears out, it could be a leading tech story for the week. Vice has confirmed that at least some of the data in the leak appears genuine. Indian travel service ixigo is going public. The company's IPO follows Zomato's own domestic debut. And speaking of IPOs, the Tencent Music offering in Hong Kong could be on hold until next year. And a trio of American tech companies raised a raft of capital as last week concluded. Carta put together $500 million in a huge deal, as Chime raised $750 million. And as the week closed, Discord was reported to be hunting up a new round at a $15 billion price tag. And stocks are set to open lower this morning. That's the morning report. Equity is back on Wednesday. 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

• 0:09Speaker 00

  Good morning. It is Monday, August 16th, 2021. This is Alex and of course you are listening to Equity. By now you've probably seen images and videos of chaos in Afghanistan. It is surreal on days of geopolitical unrest. You sit and talk about money and tech as if they were the most important things in the world. But they are what the show was about, so we will. I just wanted to acknowledge that my heart is a little bit elsewhere this morning and probably yours too. All right, now with that, let's get a markets update under our belts and then we'll talk about the biggest news in the world of technology and startups. Let's do it.

• 0:47Speaker 00

  The global equities markets are broadly red around the world today. Asian stocks fell in Monday trading, as did European shares. Before the open this morning, American stocks are also down, albeit a little bit less than their international peers. Shares of Sonos are up sharply this morning in pre-market trading after a judge gave a preliminary ruling that Google did infringe on the music hardware company's patents. That case, however, is far from over. Equities aren't the only trading assets that matter, of course. Major cryptocurrencies are largely higher in the last 24 hours, leading to a price bump for Coinbase's stock. Uniswap and Solana also posted very strong gains. Now with that in hand, let's talk about some tech.

• 1:25Speaker 00

  All right, there are three items from the weekend that require your attention and we're going to blast right through them, so listen up. First, American telco T-Mobile said this weekend that it is investigating a potentially huge breach of its customer data. A hacker claims to have data from around 100 million people and Vice confirmed that at least some of the data does appear to be genuine. If the story bears out, expect those impacted to get about 78 cents apiece in about nine years' time. This is a story to watch for this week, given its potential scale and scope of included data. Second, Indian travel booking service Exago is looking to sell around $215 million in USD worth of its shares in an IPO with the deal roughly split between primary and secondary offerings.

• 2:07Speaker 00

  Investors in Exago include Bay Capital, GIC, and Sequoia Capital India. The story matters not simply because it's a venture-backed IPO, we see a lot of those, but also because it is part of what could become a wave of Indian public offerings, implying that the country's startup ecosystem has reached something akin to full maturity. Zomato, you will recall, previously went public in a bellwether offering in India earlier this summer. And third, American technology giant Cisco confirmed that it is buying Israeli firm Espagon. Espagon sells software that helps companies track application performance with a focus on microservices. All right, to turn to this morning, what else do you need to know? Well, it does appear that the Tencent Music listing in Hong Kong may slip to next year.

• 2:49Speaker 00

  Per Nikkei Asia, the American-listed Tencent company's IPO delays come as another Chinese company put off its own Hong Kong listing due to slack demand. The regulatory crackdown in China is still reverberating, in other words, impacting domestic companies' ability to fundraise, and frankly, even de-risk American listings among Chinese companies that have already pursued them. Also recall that Tencent Music was previously forced to give up certain exclusive music licenses in a move that was broadly viewed under the rubric of antitrust instead of more capricious government action, such as in the case of, I don't know, Ant Group. As last week closed, a trio of major American technology companies got busy in the fundraising space. I want to highlight the three deals as they are good indicators of where the late-stage

• 3:33Speaker 00

  markets are today, and these are the stories that are going to matter this week as well. Karta, a company that provides cap table management software, among other services, raised $500 million in a Series G that valued the company at $7.4 billion. The round is notable for its size and the valuation pop that Karta managed, but more importantly, Carta put the round together at a $6.9 billion pre-money valuation, a price set by a community tender of its own stock earlier in the year. So, Karta was priced by investors who bought $100 million of its stock from its existing shareholders on its own exchange, and then the company raised another $0.5 billion from external investors at that price. More simply, Karta's private marketplace notched a win, and its parent company now has more money than Scrooge McDuck.

• 4:17Speaker 00

  Chime also raised an enormous amount of money, putting $750 million at a $25 billion valuation onto its cap table. That's $10 billion more than the neo-bank was worth about a year ago, if you're keeping track. According to The Wall Street Journal, the company could go public in the first half of 2022, to which we just say, hell yeah. The Chime round is fascinating as the company reached unadjusted EBITDA profitability last year, though this huge raise doesn't kind of imply that it wants to either take up its burn rate or do a bunch of deals. Either way, Chime is now stacked with cash ahead of its potential 2022 IPO. And then newcomer broke the news that Discord is looking to raise capital at a $15 billion valuation. That's a little more than double what it was worth in 2020. Recall that Microsoft

• 5:00Speaker 00

  was in talks to buy the company for $10 billion or a little bit more in between the two rounds. Now, the Discord round doesn't appear to have closed yet. It's not done, but if it did close at the rumored price, we would not be shocked. Investors are willing to pay up for software companies today at heady growth multiples that can really stretch valuations all the way into the sky. I think that we're seeing a new crop of Decacorns, startups worth $10 billion or more that will help set the tone for the tech exit market over the next 18 months. Forget the big five. They're so big and rich, it's hard to really care about them. We need to care more about a different set of technology companies.

• 5:36Speaker 00

  And that is our show for this morning. If you have time today, try to find some way to help someone else. The world is increasingly on fire, underwater, or seeing democratic norms erode and collapse. It's all pretty damn depressing, but maybe we can all do a little something. And don't forget, you can follow the show on Twitter at EquityPod. I tweet under the handle at Alex. And frankly, I hope you have a lovely day. Hugs, love, not here. And let's hope for a brighter start to the week next week. Okay.