Pod Insights Equity Podcast Equity Monday: Startups rush to announce news before holiday slowdown About this episode 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.
Tesla shares are off further this morning in the wake of declines following stock sales by Elon Musk. The company retains its $1 trillion market cap, per Yahoo Finance data, but is at risk of losing a comma if it keeps slipping.
Elsewhere in Big Tech, Microsoft is making Windows worse, while bitcoin gets an upgrade
On the startup front, we took a look at Writer.com, Zoomo and Rsquared.
Up ahead, we have the Braze, Usertesting and Sweetgreen IPOs. Nubank and Paytm are also in the queue.
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.
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Transcript 0:09 Speaker 00 Hello and welcome back to Equity, a podcast about the business of startups where we unpack the numbers and the nuance behind the headlines. This is our Monday show, your kickoff primer to the week, or primer, if you want to be fancy. Regardless, it is November 15th, 2021. My name is Alex and the holiday season is just around the corner. Yes, if you missed that, it did creep up on all of us because, well, it's been March 2020 for so long now, it's hard to know where we are in any particular calendar year. Still, if you are tired, if you are exhausted, if you are hoping that things will slow down as we approach the end of 2021, well, you might be getting what you want, as we'll see in just a minute. But before we do that, let's talk about the markets. So, looking over in China, retail sales were up more than
0:50 Speaker 00 expected. So, of course, stocks there are down. In Japan, GDP decline was bigger than expected. So, of course, stocks are up. And in the US, stocks are set to rise this morning in pre-market trading, at least that's the data we have, despite inflation and growth concerns here domestically. In the world of crypto, if that's more your jam than traditional equities, well, things are calm in the last 24 hours. And if you look back a full seven days, a great many major coins were effectively flat over the last week. So, what I'm trying to tell you is, this morning, stocks are actually more interesting than crypto. Ah, 2021, a never-ending font of surprise.
1:26 Speaker 00 All right, on to our big technology news section this morning. We are going to kick off with Tesla. Tesla's still worth more than $1 trillion, and I bring that up because its shares have fallen since Elon Musk, it's, I don't know, CEO and bon vivant Twitter troll, executed a number of high-profile sales of his stock. You probably saw this on Twitter, he was essentially baiting US politicians with, maybe I'll sell, maybe I'll enjoy a tax benefit or a tax penalty. It was the usual Tesla circus, if you will. Regardless, as a result of all of that, the company is now sharply off its 52-week highs. Tesla was worth as much as $1,243.49 per share, according to Yahoo Finance, and as of this morning, in pre-market trading, it was worth $1,008 flat. That's quite a
2:10 Speaker 00 But as I said, still worth more than a trillion. So it still has that badge on its sash. So not bad, but certainly a standard couple of weeks for Tesla. Much up, much down, much Musk. I guess that's probably the best way to say it. Elsewhere in big technology land, Microsoft is making Windows 11 worse by finding more ways to get users to use its Edge browser and Bing search engine. This is according to The Verge over there. Tom Warren is of course, one of the best reporters on the Microsoft beat. Shout out to Tom. Here's the thing. Bing has gotten better. It really has. It's actually now a pretty viable search engine that you can use day to day. And it's good. It even makes money for the company. Huzzah. It lost money for a long time. So that actually does matter. And then Edge is a pretty good browser. It's fine. You know, I use it occasionally. I'm a Windows 10 user more than Windows 11 these days, but also drove her eventually.
2:54 Speaker 00 But Microsoft forcing users to use Edge and maybe even Bing by removing workarounds is just a way to engender, I don't know, very poor developer and consumer relations. It just seems backwards for a company that has made so much progress towards engendering goodwill with the technology community. And frankly, if Microsoft doesn't feel like it can compete on a level playing field with other browsers and other search tech, well, it should try harder then. The company is worth $88 billion. And so I don't really have any pity here. Make better stuff, compete fairly, or just leave us alone. Gosh. And per the Block A cryptocurrency focused publication that I enjoy, the Taproot upgrade to Bitcoin's code went live yesterday. So if you want to run complex transactions on the Bitcoin blockchain,
3:36 Speaker 00 you may now be able to do so with a little bit more privacy than before. So looking at our list of stories, we have Tesla stock, we have Windows 11, and we have Bitcoin upgrades. So I'm going to go ahead and say, yeah, I think the holiday slowdown is here, though of course, I don't want to jinx it because news could drop literally the moment I finish this, but it feels like it's here. Happy holidays.
3:59 Speaker 00 But even if big technology news is slowing down, don't worry because startup news is very, very active. And this morning I have pulled three very interesting rounds for your enjoyment. We're going to go around the world and we're going to talk about a number of different sectors, starting off with software. Now, Writer is a company that has raised a $20 million Series A. Writer also owns the very good writer.com username. I have jealousy there. Well done, guys. The company you may have heard of because it put together a $5 million seed round last year for what TechCrunch called a quote, "AI-powered writing guide." So what does it do? Well, Writer is a startup that has built software that provides voice help, clarity help, and all sorts of kind of assistance to someone's writing, also helping them harmonize if they're on a team.
4:40 Speaker 00 So the idea here is that companies spend a lot of money on their voice, brand, and Writer will help them with that, which makes just really good sense to me, frankly. Writing is hard. Most people don't get paid to write professionally and, you know, you want to make sure you do a good job. And I don't really mind that Writer shows through its both venture capital rounds and also the fact that it charges 11 to 18 bucks per user per month for its service, if you want to give it money, does have a free tier, that writing is in fact valuable. And I just will go ahead and state my bias there. Writing is what I do for a living. Podcasting is part of my job now, I suppose, but like mostly I'm a writer. And so it's fun to see people putting a dollar value on writing better, or more clearly, or more concisely, or avoiding saying things like "writing better," you know? Over in South Korea, R Square's commercial real estate comparison and discovery service
5:25 Speaker 00 has raised a staggering $72 million round, or if you want to do that in won, an 85 billion won investment. The company has now raised 95 million USD in total. The new round is therefore the vast majority of the capital that it has raised to date. We've seen this a lot, you know, companies do well and then all of a sudden someone just writes them an enormous check. I don't think we know how good the returns on that style of investment will be. There hasn't been enough data and time in the market, but wanted to keep an eye on. Regardless, the Seoul-headquartered company plans to make further investments into the prottech sector of South Korea and larger Southeast Asia. This includes probably stuff going into Singapore, Vietnam, and Indonesia, according to TechCrunch reporting. Now, we're also seeing startups invest, I would say, earlier in similar companies outside their core geo.
6:09 Speaker 00 In this case, the company has put money into Vietnamese prottech startup Propsy back in 2020, and also Indonesian prottech company Mamakos in 2019. Now, we all know that Coinbase is out there with Coinbase Ventures writing lots of checks, and we don't expect companies to really follow that. But I will say that, you know, I think we are seeing startups invest a little bit earlier in similar companies outside their core market. I think for two reasons. One, to de-risk their future a little bit, and also probably to grow or boost the pace at which they can learn. If you have money into a lot of companies, you can get a look at what your... Market or business might do elsewhere in real time before you even show up. How cool is that? It's like intelligence for money.
6:48 Speaker 00 And then there is Zumo, that's Z O O M O, an Australian e-bike company that just raised $60 million. Now, TechCrunch writes that Zumo, quote, "wants to be the next disruptive electric vehicle company", which frankly, we kind of dig because when we think about EV companies, we think about cars. And cars have ruined our cities. Bikes are much smaller, but you know, frankly, we're lazy. So what we really want is an e-bike. Ha ha, Zumo, perfect. $30 million of the round was in equity led by Grok Ventures, Skip Capital and Arc Turn Ventures. Uh, I haven't heard of them either. And 30 million was in the form of asset-backed debt. So the $60 million was really kind of 30 and 30 equity and debt. Fair enough. Much hay is made about EVs that have four wheels. So perhaps we should see a boom in the EV economy for two-wheel money.
7:34 Speaker 00 I'm here for it. Frankly, look, I mean, if Lordstown Motors and Rivian and everyone else can raise infinite money for not making four-wheeled EVs, surely some startups can raise two-wheel EV money? It just makes sense to me. Looking ahead, I think we are going to see a little bit of a push to get startup news out in the next couple of weeks because Thanksgiving is coming and after that, folks really stop paying attention and startups love to make noise when there is an audience. So yes, big tech seems to be slowing down. Startups probably busy for a couple more weeks before a detente. But I'll just say this, let's have a slow December. It has been a crazy couple of years in the technology sector. I am tired, you are tired, we're all tired, and we've just been going at it because so much has been happening. There's been so much money, so many startups, so much new tech. And frankly, you know, we could all sit down for a minute, just breathe.
8:19 Speaker 00 So here's to a slow December and I'm sure that I just jinxed it and we're going to have the busiest December on record.
8:27 Speaker 00 All right. Looking ahead, Braze is going public this week. It should price on Tuesday and trade on Wednesday. TechCrunch previously looked into the consumer engagement software company. That was back in late October, but the IPO should put points on the board for the New York City startup. Seeing when it does list, but of course Braze is not alone in going public. We also have user testing that should price and trade on the same schedule. I haven't written a About user testing yet because I've been behind my bad about that. But an IPO we have covered sweet green should price on Wednesday and trade on Thursday. So it's gonna be a busy IPO week from the US and then Paytm in India is coming up. And also don't forget New Bank is also going public. Past that, however, the IPO queue is starting to thin out a bit. Again, we are coming up to the end of the year.
9:12 Speaker 00 I want to keep saying that because it's still true, which means that the IPOs we're looking at are probably going to be the ones that we have. Maybe one or two more software IPOs, but really guys, who wants to go public when everyone else is on vacation? It's just not the jam. Naturally, though, we don't really expect the unicorn craze to slow. Private investors were likely to continue to mint new unicorns at a floor price of 1 billion, despite a period of expected slow withdrawals. And if you don't like my crypto joke there, too bad. And there are still amazingly a couple of earnings to get through, some that very much matter. I've parsed the list and here's what you need to know. Alibaba should report earnings this week, which will be very important from the Chinese perspective. If you care about the China market, well, that's gonna be a big one. Zoom should be next week and then we have Salesforce, Snowflake and CrowdStrike coming through the start of December.
9:55 Speaker 00 So quite a lot of data coming on about e-commerce, enterprise software, sales, cybersecurity, and I would even throw in data lakes there. Quite a lot's coming up. Stay tuned, everybody.
10:07 Speaker 00 All right, ladies and gentlemen, that is our Monday show. Do not forget that you can follow Equity over on Twitter where we tweet under the handle EquityPod. If you want to tell me that my diction is terrible, that my topic selection is weak, you can tweet me where I go under the handle at Alex. We are back Wednesday morning at the absolute latest. Until then, goodbye.
10:30 Speaker 00 Hey, everyone, Alex here yet again. So right after we finished recording this for you, news broke that Casper is going private. So I just wanted to make sure that we added that to the show so you're caught up. So Casper, as I'm sure you know, is an American D to C mattress company. Raised a bunch of money before going public. And then after it did go public, it struggled. And essentially Casper became a cautionary tale that D to C companies may not always perform like software companies. Shockingly enough, we've talked about this a lot over on the blog and also on the podcast. So you should be aware of Casper by now, but the news is that it's being sold to Durational Capital. Management for $6.90 per share, which is a 94% premium to its November 12th price, and 80% premium over its volume weighted average price ending November 12th, 2021.
11:12 Speaker 00 So a pretty strong premium, a better exit for Casper than I would have expected. The company certainly could use some time away from public markets to figure out its business, get itself put back into shape. The company also dropped earnings today, so we'll have notes about that and the sale up on the site soon. But in the meantime, once again, this is Alex. Goodbye.
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