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The TechCrunch Exchange: A Weekly Startups and Markets Update

Welcome to this week’s edition of The TechCrunch Exchange, a newsletter dedicated to the latest in startups and market trends. This publication is derived from the daily Extra Crunch column, but is freely available for your weekend perusal.

Pico’s Recent Funding and Evolution

Last week, TechCrunch reported on Pico’s $6.5 million funding achievement, characterizing the company as a New York-based entity assisting online creators and media organizations in revenue generation and customer data management. The Exchange has previously examined Pico, notably during a 2020 analysis of independent publishers and subscription-based media.

While Anthony Ha provided excellent coverage of Pico’s funding round, I also engaged in a Zoom discussion with the company to gain a deeper understanding of their recent relaunch and associated changes.

The Shift in Creative Digital Tooling

The Pico team outlined the evolution of creative digital tooling, noting that initial phases prioritized content hosting and distribution. They believe the current generation of tools will usher in an era where monetization, rather than content management systems (CMS) like Substack or WordPress, will be central.

This represents Pico’s core strategy, leading them to develop what they describe as an operating system specifically for the creator market.

Monetization as the New Focus

A digital landscape centered around monetization is anticipated to be more financially rewarding than previous iterations. Pico posits that creators will inevitably diversify their offerings – adopting multiple SKUs or expanding across various platforms.

Consequently, maintaining a unified, centralized record of customer data is expected to become increasingly vital.

Pico’s Revamped Service and Growth

The company’s updated service functions as a monetization platform, coupled with a creator-centric CRM that integrates with existing CMS platforms or other digital publishing channels. Customer acquisition has been strong, experiencing approximately a 5x increase over the past year.

It remains to be seen how effectively Pico can realize its vision and contribute to the development of a sustainable middle class within the creator economy.

The Transformation of Grocery Shopping is Happening in Physical Stores

While much attention has been given to the growth of Instacart during the pandemic, the majority of consumers still prefer purchasing produce and other groceries directly from brick-and-mortar stores.

Grocery retailers recognize this trend. However, they face challenges with traditionally low profit margins and increasing competition for customer loyalty in the age of Instacart.

A key question for grocers is how to embrace digital strategies without relinquishing direct customer relationships to third-party platforms.

Swiftly may offer a solution. This startup is developing technology designed to empower grocery chains, regardless of size, to modernize their digital presence and unlock new revenue streams through advertising.

Consumers also benefit from a wider range of shopping options.

According to Crunchbase, Swiftly has secured over $15 million in funding. The company recently gained prominence through a partnership with Dollar Tree, a retailer boasting a vast network of stores across the United States.

I have followed Swiftly’s progress for some time, initially meeting co-founder Henry Kim during his work on Sneakpeeq, which later evolved into Symphony Commerce.

Quantum Retail eventually acquired Symphony Commerce. Throughout conversations with Kim in the San Francisco area, he consistently highlighted the potential within the grocery market, drawing on his prior experience in the sector.

It’s rewarding to see a company born from years of vision and planning secure a significant partnership like the one with Dollar Tree.

Swiftly’s offerings are centered around two core products: a retail system and a media service.

The retail system provides mobile shoppers with features like streamlined checkout, loyalty programs, and personalized promotions.

The media service enables traditional grocery stores to capture a portion of the advertising revenue from consumer packaged goods (CPG) companies, often missed in the past.

Furthermore, it incorporates analytics to accurately measure the effectiveness of advertising campaigns.

Given their recent success with a major public deal, I anticipate Swiftly will seek additional funding in the coming months. Further updates will be provided as they become available.

UiPath's IPO, SPAC Activity, and Recent Funding Rounds

The Exchange has recently covered the UiPath IPO extensively. Initial pricing suggested potential concerns for investors in later funding stages, as valuations appeared somewhat conservative. However, the company subsequently increased its price range, alleviating these initial worries.

Ultimately, UiPath priced its IPO above the revised range, albeit at a slight discount compared to its final private valuation. Following its market debut, the stock price increased, and the CFO expressed satisfaction with the outcome.

To gain further insight into the valuation transition from private to public markets, The Exchange consulted Dharmesh Thakker, a general partner at Battery Ventures. He offered his perspective on the company’s final private round in relation to its eventual IPO price:

His assessment is optimistic. Conversely, Brendan Burke, an analyst at PitchBook, provided a more critical viewpoint regarding UiPath and its competitive landscape:

This observation is noteworthy, as obtaining candid negative feedback from analysts can be challenging due to concerns about professional courtesy.

Turning to recent SPAC deals, SmartRent is merging with Fifth Wall Acquisition Corp. I. The company previously secured over $100 million in funding from investors including RET Ventures, Spark Capital, and Bain Capital Ventures, as per Crunchbase data.

This transaction values SmartRent at $2.2 billion in equity, representing a significant exit for venture backers. The investor deck can be found here. SmartRent operates in a similar sector to Latch, which is also pursuing a SPAC merger. The emergence of competing operating systems for rental properties promises an interesting dynamic. (Further details on Latch’s SPAC deal are available here.)

Lastly, HYPR announced a $35 million funding round this week. Among numerous venture capital deals that warranted coverage but were not possible to address, HYPR stands out due to its vision of a password-less future. With a recently completed Series C round, the company is well-positioned to pursue this ambitious goal.

Recent Funding and Market Trends

This week included coverage of several funding rounds completed by companies that recently participated in the Y Combinator program. Specifically, we examined the recent financial activity of both Queenly and Albedo.

Details regarding these funding events are available for review.

Buy Now, Pay Later Market Growth

Recent earnings reports from Afterpay indicate continued substantial expansion within the buy-now-pay-later (BNPL) sector.

The market is demonstrating significant growth, suggesting strong consumer adoption and increasing transaction volumes.

This growth trajectory is noteworthy for industry observers and investors alike.

Featured Companies

• Queenly: A recent Y Combinator graduate that successfully secured new funding.
• Albedo: Another Y Combinator participant who recently completed a funding round.

Further information on these companies and their respective funding rounds can be found through dedicated resources.

These developments highlight the ongoing dynamism within the startup ecosystem.

– Alex