Equity Monday: New unicorns kick off the week as India get cross with Starlink

With a holiday-impacted week behind us, we hope that you are ready for the next few weeks of busy news. Because starting in the back-half of December, the world is going to slow down dramatically. Make sure that you are following the show on Twitter, and let's get into it! No tech IPOs this week, though we will see earnings from select SaaS companies. That means that our information flow will slow over the next few days. India is irked at Starlink, telling the Elon Musk company to get its regulatory paperwork in order. Raspberry Pi is going public, it's expected. The micro-computer company could debut in Spring of 2022 on the London exchanges. And black Friday online sales dipped, though we have a guess as to why. Two acquisitions took place recently that caught our eye, including Booking Holdings buying Etraveli Group for $1.8 billion, and Clearlake buying Quest from Francisco Partners. From the startup world, two deals: Slice is now a unicorn thanks to Tiger Global, while Thought Machine is also now a unicorn thanks to its own six-figure round. Two new unicorns to start the week? Why not. And, finally, this essay on crypto. The show is back Wednesday! We'll see you then! 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, everybody, and welcome to Equity Monday for November 29th, 2021. Of course, this is the show where we unpack the numbers and the nuance behind the business of startups. But on Mondays, we talk about the globe, what's going on, economics and other bits of news that matter to kind of start off the week on a good foot. So on that note, stocks did fall last Friday, but don't worry, they're going to claw a bit of that back today in the US, according to pre-market trading. Over in Europe, stocks rose sharply today, whereas in Asia, they fell. So what's going on? Well, in a sense, the Omicron variant of COVID-19 is turning the world's markets into a Rorschach test. You can kind of see in the variant what you want to see and react accordingly. Cryptos are up this morning after being down over the weekend, so I'm going to go ahead and

• 0:51Speaker 00

  say nothing major to report on that front. And critically, no IPOs from our world are expected this week, which should cut down on news volume just a little bit. But things will still happen. Don't forget that we have earnings still happening somehow magically. It's always earnings season. This week, Salesforce, Snowflake, CrowdStrike, and if our notes are holding up, Zscaler and Box as well. So if SaaS is your jam, if you just love software, well, you'll have a lot of data this week. And if you don't, well, it's going to be a quiet week. And now let's talk about the weekend. Taking a look over the last couple of days, there are a few things that I was chewing on this morning that I thought we should talk about. One, it was reported that Raspberry Pi, the kind of microcomputer manufacturer, may take

• 1:35Speaker 00

  its business public. The company could list in 2022, perhaps in the spring, according to The Telegraph. Raspberry Pi, as I'm sure you recall, last raised $45 million in September. TechCrunch covered that, noting at the time that the company was worth $500 million on a pre-money basis, so call it 550. Where could it go public? We'll have to see. Frankly, we are just stoked to see the numbers here. Is Raspberry Pi a good business? I have absolutely no idea. Did I think it was big enough to go public? Absolutely not. Now, keep in mind that the company is expected to go public in London, a place where you can go public a little bit earlier than most companies do on the tech Side in the United States. So frankly, maybe they're just taking advantage of that structural difference in how companies list and going public. Maybe we'll see, but oh my

• 2:18Speaker 00

  gosh, give us the numbers. I can't wait. And news from India this morning. India is cross with Elon Musk's Starlink Internet Service with the company's Department of Technology telling the company to quote refrain from booking slash rendering the satellite internet services in India with immediate effect. So I guess we now know that Starlink views India as an important commercial market, given that it was doing enough work in the country to get not only noticed by domestic regulators, but also publicly told off. Continuing the quote from DOT, the government of India has asked the company to comply with Indian regulatory framework for rendering the satellite-based communication services. Well, that's a mouthful, but I think that's them saying, no more, please stop that. And an interesting note this morning about the world of online

• 3:00Speaker 00

  shopping. Now you and I online shop, we've been doing it for a long time and probably more since the pandemic began, which matters because online shopping during the so-called Black Friday holiday here in the US saw its total sales decline from nine billion last year to 8.9 billion this year. And this has been reported all across the business media. So why do we care? Well, usually we've seen e-commerce numbers go up and to the right, but I think actually I'm not that shocked to see this particular number go down. Why? Well, the pandemic has meant that we've all been at home more. So I think we've just kind of better kidded out our lives over the last 18, 20, 24, whatever many months it's been now. So essentially we've turned travel money into stuff money. So our houses are better stocked. So why do we need Black Friday deals? We've already bought a bunch of stuff.

• 3:45Speaker 00

  Now, the e-commerce boom, which is to say the taking over of traditional retail by digital channels will continue. Just don't expect every number to always go up. Adding to our big technology coverage this morning, two little notes that are both acquisitions that I think add up something kind of material. So we need to talk about it. The first one is that Booking Holdings is buying Flight Partner at Etraveli Group for $1.8 billion. That's according to Skiff. The publication says that quote at Travelli Powers booking.com is an instant flights business and that this is the second deal from booking in the last couple of weeks. Now over in the private equity world separately, clearly capital Is buying Quest software from Francisco Partners. That is a boring sentence, but what matters is the Wall Street Journal reports the deal could be announced today.

• 4:28Speaker 00

  And quote values Quest at 5.4 billion, including debt. So presuming there's an enterprise valuation, whatever. What matters is that there's around seven, 7.2 billion dollars in M and A expected to start this effectively December week. That's a lot of money for a kind of late calendar Monday, if you will. I think it could mean we may see more deals down the road. That's my hope at least because gosh, who would have thought we'd see these two today, you know?

• 4:56Speaker 00

  And from the world of startups, we have two bits of news for you this morning. And when I say startups, I really mean unicorns, which means that not really startups. So how about this? Here are two bits of news from the late stage private markets. There you go. That's a little bit more reasonable. Kicking off, we're talking about Slice. Now Slice was valued at under $200 million in a financing round this June. It has just raised a $220 million round that values at more than 1 billion. So the company just raised more money in one round now than it was worth back in June. That's very 2021. And so of course you know that this round was led by none other than Tiger Global. Yes. Inside Partners co-led. And of course, if you don't know Slice, this is not the pizza company. This is Slice, the Indian company that issues credit cards. There you go.

• 5:41Speaker 00

  And the second bit of news from the unicorn land is that Thought Machines cloud-based B2B banking service has just raised a $200 million round that pushes its valuation above the $1 billion mark. So very similar round actually to what we just heard about from Slice. That's two new unicorns for you this morning. The latter selling cloud-delivered banking products to both legacy and new banks and based in London. But I mean, my gosh, why not kick off essentially the last month of the year with two new unicorns in one morning? I mean, you know, it's very 2021, isn't it?

• 6:13Speaker 00

  Closing out this morning, the big point of conversation on technology and venture and startup Twitter this weekend was an essay from Steven Deal about crypto and why investors love it. Now, Deal is a crypto skeptic, it's fair to say, and a developer. His take lit up Twitter and caused more than one argument, and I'll just say this, it's also incredibly good. Now, I'll link to it in the show notes over on TechCrunch, but I'm going to go ahead and read to you two core bits. These are two paragraphs from the essay that I think get at the core of what Steven is trying to say. But really, read the whole thing, have your own take, et cetera. But I wanted to share this bit of thinking because I think it matters. Here we go. "The accreditation divide is largely the fuel behind the Valley's obsession with crypto tokens and the 2017 ICO mania.

• 6:56Speaker 00

  Suddenly, you have an asset class that you can buy from your portfolio companies that looks like a security, swims like a security, and quacks like a security, but is not regulated as a security. In fact, it's not regulated at all. Close your eyes and you're seeing dollar signs, dollar signs and limitless returns for your portfolio. If there's any innovation in crypto assets, it's not in software engineering, but in financial engineering. We've created a new financial product like an options contract on a startup potentially building something real. But in case they don't, you can always exercise it early by simply dumping the stock on the public to catch a completely untethered to the company's success. You don't need to file NS1 or have a coherent prospectus about attracting customers or business or revenue. Hell, the company doesn't even have to have a business model at all.

• 7:40Speaker 00

  And in fact, the best performing crypto assets are the ones that literally don't do anything at all. They just need to tell a good story." Oof, man. Now, chewing on this, I ran into some data concerning how some popular tokens were distributed at initial allocation. And yeah, it seems that like with other asset classes, the already wealthy are going to do very, very well with crypto, while the rest of the market chases a fraction of the upside. Decentralization, kinda, but not really in a financial sense.

• 8:10Speaker 00

  And that is our show. Do not forget, you can follow Equity on Twitter where we tweet and Twitter space under the handle EquityPod. Also, I'm on Twitter where I tweet under the handle @Alex. Don't follow me unless you want some random tweets about heavy metal occasionally. And we're back Wednesday. We'll see you then. Hugs. Bye.