Facebook Podcasts & Live Audio Rooms Launch in the US - Daily Crunch

Daily Crunch: June 21, 2021

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Greetings, and welcome to today’s Daily Crunch for June 21, 2021. The technology sector isn't experiencing a typical summer lull.

Key Developments

Facebook is directly competing with platforms like Clubhouse and Spotify. India continues to navigate the complexities of its rapidly expanding tech landscape.

Fundraising activity remains robust across the board. Additionally, details have emerged regarding a novel venture capital fund with an unusual structure.

Industry Trends

• Competition Intensifies: Facebook’s moves signal increased rivalry in the social audio and music streaming spaces.
• India’s Tech Growth: Managing the growth of the technology industry presents ongoing challenges for India.
• Continued Investment: Companies are actively securing funding, indicating strong investor confidence.
• Innovative VC Funds: New investment vehicles are appearing, challenging traditional fund models.

These developments highlight the dynamic nature of the current tech environment. The pace of innovation and investment remains exceptionally high.

— Alex

TechCrunch's Top 3 Developments

Here's a rundown of the most noteworthy stories from TechCrunch today, covering developments in social audio, fintech, and the IPO market.

Facebook Enters the Live Audio Arena

Facebook has officially launched its live-audio service, directly challenging the popularity of Clubhouse and Spotify. This move comes after the significant traction Clubhouse gained in early 2021, prompting numerous tech giants to explore similar features.

Whether Facebook will successfully compete in this space remains to be seen. The company's previous attempts to dominate other markets, such as online dating, haven't always yielded the desired results. Therefore, Facebook’s entry into live audio is currently more aspirational than guaranteed success.

Revolut's Financial Performance

Recent financial data released by European fintech unicorn Revolut has been analyzed by TechCrunch’s Romain Dillet. The analysis reveals that while 2020 was unprofitable for Revolut, the company demonstrated a clear trend of decreasing losses throughout the year.

Further examination of Revolut’s financials is available, providing a deeper understanding of the company’s trajectory and performance.

Continued Activity in the IPO Market

Despite the ongoing anticipation for Robinhood’s IPO filing, the market for initial public offerings remains active. Following WalkMe’s debut last week, additional tech companies are preparing to go public.

Couchbase, a database software company supported by Accel, Mayfield, and Ignition Partners, filed its IPO paperwork today. More companies are expected to submit their filings in the coming weeks, indicating a robust IPO pipeline.

Here’s a quick summary of the key takeaways:

• Facebook is now competing in the live-audio space with Clubhouse and Spotify.
• Revolut showed improving financial performance in 2020 despite overall unprofitability.
• The IPO market continues to see new tech companies preparing to go public.

Startups

Regular monitoring of the startup funding landscape is crucial. Consequently, we are occasionally dedicating a specific section to venture capital news. Today represents one such instance. However, let's begin with general startup updates:

• $10M Investment in Electric Bikes: Ubco, a startup specializing in electric utility bikes and based in New Zealand, has recently secured $10 million in funding. The company’s flagship product, the Ubco 2X2, is an all-wheel-drive electric motorbike characterized by its dirt bike aesthetic and moped-like handling.
• Growing Consumer Reliance on Credit: TechCrunch reported today on Kredivo, an Indonesian buy now, pay later (BNPL) startup, expanding its credit facilities by $100 million. This new funding effectively doubles Kredivo’s available debt capacity.
• The Enduring Value of Music Licensing: The intricacies of music licensing were highlighted by Ludacris’ advice to emerging artists to seek legal counsel. Navigating mechanical licenses and platform fees can be challenging. However, this complexity also presents significant financial opportunities.
• Continued Interest in the Sneaker Market: SoleSavy’s recent $12.5 million Series A funding round indicates ongoing investor confidence in the footwear industry. Unlike StockX, which operates as a retail marketplace, SoleSavy focuses on cultivating a dedicated community of sneaker enthusiasts.

This community functions similarly to a subreddit, but utilizes a different content management system and hosting infrastructure.

Funding Highlights

The recent funding rounds demonstrate diverse investment interests. From electric vehicles to alternative credit solutions and the evolving music industry, investors are actively seeking opportunities in innovative companies.

Trends in Startup Investment

Several key trends are apparent. Urban areas are increasingly prioritizing sustainable transportation options, benefiting companies like Ubco. Furthermore, the demand for flexible payment methods continues to rise, as evidenced by Kredivo’s success.

The Power of Community

SoleSavy’s approach highlights the importance of building strong communities around specific interests. This strategy allows companies to foster brand loyalty and create valuable engagement with their target audience.

Music Industry Innovation

Songtradr’s funding underscores the ongoing need for streamlined music licensing solutions. The company is addressing a complex market with a platform designed to connect artists with opportunities in advertising, film, television, and gaming.

Venture Capital Updates

Determining the optimal educational path for successful entrepreneurs is a frequent discussion. While numerous universities claim to produce the best innovators, a significant number of founders achieve success without a formal degree.

The Academy Investor Network is focusing on a specific cohort: graduates from United States military academies. They believe this group represents a promising investment opportunity.

Fundraising Progress

The fund has recently secured a $2.5 million anchor limited partner (LP) commitment for its inaugural fund. This initial capital is supplemented by funding from Scout Ventures, where co-founder Emily McMahan serves as a venture partner.

McMahan is collaborating with Sherman Williams, with the aim of achieving a total first-time fundraise of $50 million.

Investment Thesis

The success of their investment strategy remains to be seen. However, the firm is confident in the unique qualities of founders from military academies.

They playfully suggest that, at a minimum, they can confidently assert having the highest quality founders when it comes to endurance and resilience – qualities honed through rigorous training, often referred to as "rucking."

• Key Focus: Graduates of American military academies.
• Fund Goal: A $50 million first fundraise.
• Initial Funding: $2.5 million anchor LP commitment.

This specialized approach to venture capital highlights a growing trend of investors seeking founders with specific, and often unconventional, backgrounds.

The Shift in Early-Stage Funding: Seed Rounds Evolving

Typically, when assessments are normalized, those with lower scores benefit from the adjustment. However, within the cloud computing industry, this dynamic is reversed.

Data from PitchBook indicates that, as of the first quarter of 2021, cloud-based startups achieve a median Series A funding round of approximately $8 million.

The increasing prevalence of funding rounds exceeding $100 million frequently results in company valuations reaching multi-billion dollar levels.

Finding the Right Investor for Pre-Series A Growth

Andy Stinnes, a general partner at Cloud Apps Capital Partners, advises founders navigating the period between angel investment and Series A to prioritize investors who demonstrate satisfaction with Annual Recurring Revenue (ARR) between $200,000 and $500,000.

These investors, often specializing in cloud technologies, are generally more receptive to backing companies that are still in the process of achieving demonstrable product-market fit.

Understanding Investor Expectations

Specialist venture capital firms are willing to consider investments even before a startup has definitively proven its market viability.

This contrasts with more traditional investment approaches, where product-market fit is often a prerequisite for significant funding.

(Access to exclusive insights and resources for founders and startup teams is available through Extra Crunch. Registration can be completed here.)

Big Tech Inc.

Increased governmental scrutiny is impacting the technology sector in India. The Indian e-commerce market is substantial, witnessing intense competition between Amazon and Walmart alongside local businesses.

This competition includes acquisitions, such as Walmart’s purchase of Flipkart, as companies vie for a larger share of the expanding market. Consequently, concerns are rising, potentially leading to government regulation.

Recent reports indicate that India is considering measures to prohibit flash sales on e-commerce platforms. Furthermore, the government aims to prevent affiliated entities from operating as sellers, seeking to reinforce market rules.

Simultaneously, India’s government continues to engage in ongoing disputes with Twitter, a matter we have covered extensively.

Germany is intensifying its regulatory focus on Apple. A fourth investigation has been launched, escalating Germany’s oversight of competition within the technology landscape.

This particular inquiry will assess whether Apple satisfies the criteria outlined in Germany’s revised competition legislation. Should Apple meet these thresholds, the German government would gain the authority to “proactively intervene” in the company’s operations.

Within its home market, Apple is also facing criticism regarding its practices concerning its mobile app ecosystem. The company both governs this ecosystem and derives revenue from it.

Uber has finalized the acquisition of Cornershop. This marks a significant development for Latin American tech companies, as the ride-hailing giant will acquire the remaining 47% of Cornershop.

The transaction involves 29 million Uber shares, valued at approximately $1.3 billion in Uber equity.

Uber’s previous acquisition of Postmates has expanded its delivery capabilities beyond transportation services. The Cornershop acquisition aligns with this strategy, as the latter also operates within the delivery sector.

TechCrunch Insights: Leading Growth Marketing Professionals

TechCrunch is dedicated to assisting startups in locating specialists suited to their specific requirements. Currently, a curated list of premier growth marketers is being developed to facilitate this process.

Since the launch of our survey, numerous valuable recommendations concerning growth marketing professionals within the startup ecosystem have been submitted.

Ongoing Survey and Submissions

We anticipate receiving further responses and encourage continued participation. The survey can be accessed through this link.

Growth Marketing Coverage on TechCrunch

TechCrunch’s editorial content relating to growth marketing encompasses articles authored by our staff, as well as contributions from guest writers.

Examples include pieces such as “5 tips for brands that want to succeed in the new era of influencer marketing” penned by Eric Dahan for Extra Crunch.

• Interested parties seeking to contribute a column are invited to find more information here.

Growth marketing strategies are continually evolving, and TechCrunch aims to provide comprehensive coverage of these developments.

The goal is to connect startups with the expertise needed to thrive in a competitive landscape.