Open Raises $100M Series C - Daily Crunch

Daily Crunch: October 12, 2021

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Q4 Momentum and Startup Activity

Greetings, and welcome to the Daily Crunch for October 12, 2021. The fourth quarter is proving to be quite dynamic.

We are observing a substantial number of initial public offering (IPO) filings. Furthermore, as detailed below, the startup landscape is brimming with activity.

Apple's Continued Innovation

Notably, Apple has announced another upcoming event. This suggests that predictions of a slowdown in the fourth quarter may not materialize.

– Alex

TechCrunch's Top 3 Developments

Here's a rundown of the most noteworthy stories from TechCrunch, covering developments in cryptocurrency, venture capital, and the evolving digital publishing landscape.

Coinbase Enters the NFT Arena

Coinbase, a leading early player in the cryptocurrency exchange market, is now expanding its services to include NFTs (Non-Fungible Tokens). This move positions Coinbase to compete with existing NFT marketplaces.

The increasing interest in NFTs, driven by speculation around blockchain-verified ownership of digital assets like images, has fueled this expansion. Demand for digital collectibles, often referred to as "JPGs," is high.

Coinbase aims to capture a significant share of the NFT market, currently dominated by platforms like OpenSea. Interestingly, both Coinbase and OpenSea have received investment from the venture capital firm a16z, creating a notable competitive dynamic.

The Growing Number of Unicorns

Recent data from the third quarter of the year reveals a continued surge in venture capital investment into startups worldwide.

This influx of capital is resulting in a record number of unicorn companies – privately held startups valued at over $1 billion. However, this rapid growth presents challenges related to eventual exit strategies for these companies.

TechCrunch has analyzed the potential risks and complications associated with the increasing congestion of privately held unicorns seeking opportunities for public offerings or acquisitions.

The Rise of Newsletter Platforms

The success of Substack in establishing a thriving paid-newsletter ecosystem is inspiring new competitors.

Memberful, a product associated with Patreon, is now entering the paid-newsletter space. Unlike Substack, Memberful proposes a different revenue-sharing model.

Memberful will implement a flat-fee structure alongside a smaller percentage taken from writer earnings. This approach could offer substantial savings for creators with established audiences.

Startups & Venture Capital Updates

Open, a prominent Indian neobank, is currently featured in leading startup news following a recent capital raise, with participation from Google. Markets experiencing increased digital adoption and underbanked populations present significant opportunities for neobanking ventures. India demonstrably fits this profile, as evidenced by Open’s latest funding success.

The company secured $100 million in funding, resulting in a valuation of $500 million, according to TechCrunch reports. Temasek spearheaded the investment round, alongside contributions from Google and Tiger Global.

Recent Funding Rounds & Innovations

• Space Debris Tracking with Privateer: The challenge of orbital debris is gaining attention, and Privateer is aiming to provide a solution. The company intends to develop capabilities for locating and mapping space junk orbiting Earth. While the existence of substantial space debris is well-known, its precise location remains a complex issue.
• Hailo Secures Funding for AI Chips: Despite ongoing disruptions in the global silicon market, Hailo has successfully raised $136 million, achieving a valuation of approximately $1 billion, as reported by TechCrunch. The performance of different computing tasks varies depending on chip architecture, explaining why Intel doesn't dominate the AI chip sector. The global chip shortage is expected to persist for the foreseeable future.
• Atomic and the Future of Payroll APIs: The banking-as-a-service sector is rapidly evolving, with startups exploring new areas within the financial landscape to modernize existing systems. Atomic is one such company, offering a product that enables consumers to connect income streams to various services and verify employment and income data.
• SoWork and the Rise of Virtual Co-working: Are you experiencing isolation while working remotely? SoWork believes many are. This virtual co-working startup recently raised $15 million in funding. The appeal of virtual collaboration may depend on comfort with extended audio communication – a practice familiar to gamers – but SoWork’s funding demonstrates continued interest even as some companies return to office environments.
• MentalHappy: Accessible Mental Health Support: Navigating insurance and finding a therapist can be a frustrating process. MentalHappy offers an alternative approach, focusing on peer support groups for a monthly fee, rather than attempting to address therapist shortages or high costs. This model provides a valuable and accessible resource.
• EngFlow: Accelerating Code Compilation: Software development relies on efficient code compilation. EngFlow aims to reduce compilation times, effectively eliminating the “smoke break” equivalent for engineers. The company has secured funding to further its efforts in this area.
• Plume’s Wi-Fi Network Expansion: Plume, a communications startup partnering with carriers to deliver smart mesh Wi-Fi and related smart home services, has achieved a valuation of $2.6 billion. This company’s growth and impact warrant greater recognition.
• Canva Ventures into Video Editing: Canva, known for its graphic design tools, is now expanding its offerings to include video editing capabilities.

Navigating Enterprise Sales: Common Missteps by Startups Like Slack

Approaching established enterprise-level organizations can seem challenging for startups. However, Jennifer Smith, CEO and co-founder of Scribe, asserts that it’s never premature to begin developing an enterprise sales strategy.

A significant error made by numerous early-stage businesses is delaying the implementation of plans to compete with dominant industry players, according to Smith. A case in point is Slack, which was acquired by Salesforce for $27.2 billion twelve years following its inception.

This raises a critical question: could Slack have maintained its independence as a publicly traded company had it prioritized enterprise sales earlier in its development?

The development of a robust enterprise sales approach is often underestimated by startups focused on initial growth.

Many companies prioritize rapid user acquisition and product-market fit, postponing consideration of the complexities involved in securing large enterprise contracts.

The Importance of Early Enterprise Engagement

Delaying enterprise engagement can lead to missed opportunities and ultimately, a less favorable exit scenario.

Establishing relationships with key decision-makers within target organizations early on allows startups to understand enterprise needs and tailor their solutions accordingly.

Furthermore, early engagement can provide valuable feedback for product development and refinement, ensuring the startup’s offering aligns with the demands of larger clients.

Strategic considerations should include identifying ideal customer profiles within the enterprise space.

Understanding the specific pain points and challenges faced by these potential clients is crucial for crafting a compelling value proposition.

It’s also important to develop a sales process that is tailored to the enterprise sales cycle, which is typically longer and more complex than that of smaller businesses.

Big Tech Inc.

Recent developments highlight the ongoing tensions between major technology companies and developers.

Specifically, Google has shifted its approach in the legal battle with Epic, now requesting monetary compensation.

Google and Epic's Legal Dispute

As Epic Games challenges both Google and Apple in court, the complexities of altering established application marketplace dynamics are becoming apparent.

Apple is currently pursuing an appeal following a limited favorable ruling for Epic.

Simultaneously, Google is seeking financial restitution from the creators of Fortnite.

Apple Fitness+ User Interface Analysis

A recent TechCrunch guest article provided an insightful examination of the user interface for Apple Fitness+.

The analysis was well-received and offered a detailed perspective on the platform’s design.

Twitter's Spaces Audio Accelerator

Twitter is introducing an audio accelerator program designed to bolster its Spaces feature, a direct competitor to Clubhouse.

The TechCrunch team appreciates the simplicity and integration of Twitter Spaces within the existing Twitter platform.

The long-term success of Spaces, and similar services, will depend on their ability to attract and maintain prominent content creators.

It remains to be seen which platform will ultimately succeed in securing the most sought-after talent.

TechCrunch Experts

An additional segment has been integrated into the Experts initiative. Should you know of a software consulting firm that would be beneficial for other startup founders, please submit your recommendations through this survey.

A testimonial received from a user is presented below.

Consulting Firm: Arbisoft

Referred by: Omri Traub, Chief Executive Officer of Popcart

Testimonial: “A highly capable development team, encompassing development, quality assurance, and DevOps, was successfully assembled. Access to premier talent was provided, alongside crucial hiring flexibility.

The ability to onboard a skilled developer to our team within a week was particularly valuable. Traditional recruitment processes in locations like Boston or the U.S. would have required weeks, even months, to achieve the same result.”

Community Engagement

Danny Crichton will be hosting a Twitter Spaces interview on Thursday, October 14th. The event is scheduled to begin at 2 p.m. PDT / 5 p.m. EDT.

Interview with Jacob Helberg

The featured guest will be Jacob Helberg, author of the forthcoming book, “The Wires of War.” The book’s official release date is scheduled for tomorrow.

This discussion offers an opportunity to learn more about Helberg’s insights. Attendees can engage directly with the author and Crichton during the live event.

Image Credits: Simon & Schuster, Inc.

Don't miss this chance to hear about “The Wires of War” directly from its author. The Twitter Spaces interview promises to be an informative and engaging session.