Klarna Secures $639M Funding - Europe's Top Fintech

Daily Crunch: June 10, 2021

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TechCrunch Update

Greetings, and welcome to the Daily Crunch for June 10, 2021. TechCrunch is issuing a brief announcement regarding the approaching deadline for securing an early-bird ticket to TC Early Stage 2021: Marketing & Fundraising.

This event is scheduled for early July. It promises to be an exceptionally valuable experience, particularly for founders in the early stages of their ventures. Don't miss the opportunity to register at the discounted rate.

— Alex

TechCrunch's Weekly Highlights

This week, TechCrunch covered several key developments in the technology sector, ranging from cloud gaming innovations to shifts in startup culture and significant funding rounds.

Microsoft's Cloud Gaming Ambitions

Microsoft is actively pursuing advancements in cloud gaming, aiming to establish a robust platform that surpasses the limitations of previous attempts like Stadia.

The company is reportedly developing a dedicated device specifically for game streaming. Furthermore, Microsoft intends to integrate this technology directly into television sets.

For gamers, this represents a potentially positive development, particularly for those seeking alternatives to expensive graphics card upgrades.

Klarna Secures $639 Million in Funding

The buy-now-pay-later (BNPL) sector continues to attract substantial investment. This week, Klarna successfully raised $639 million in a new funding round.

This influx of capital reflects the increasing valuation and rapid expansion of the BNPL market. Further details regarding this growth can be found in TechCrunch’s coverage.

Evolving Tech Workplace Dynamics

Recent events at companies like Medium, Coinbase, and Basecamp have sparked conversations about evolving cultural expectations within the tech industry.

These discussions are also occurring within the Y Combinator accelerator program, highlighting a growing awareness among tech employees regarding their influence over employers.

The unrest signals a potential shift in the balance of power, with employees increasingly asserting their expectations for workplace environments.

These changes indicate a broader re-evaluation of tech culture and employee rights.

Startups and Venture Capital Updates

This article details recent funding activities within the startup ecosystem, alongside updates concerning venture capital funds and initial public offerings (IPOs) of unicorn companies.

Recent Funding Rounds

Several startups have recently secured significant funding, highlighting key trends in the investment landscape.

• AI-Driven Recruitment Gains Traction: Eightfold AI’s successful $220 million funding round, resulting in a $2.1 billion valuation, demonstrates the value investors place on artificial intelligence in the recruitment sector. This valuation represents a substantial increase from its previous standing.
• Workday Analytics Emerges: Time is Ltd has secured $5.6 million in funding for its platform, which provides analytics on employee time allocation. This tool allows companies to understand how employees spend their workdays across different applications.
• Fintech Focus on MSMEs: BukuWarung, a fintech company targeting micro, small, and medium-sized businesses in Indonesia, has raised a $60 million Series A round. This investment underscores the growing need for financial technology solutions within this market segment.

Venture Capital Fund News

The venture capital space itself has seen notable fundraisings.

• Increased Funding for European Startups: Balderton Capital has launched a $680 million “early-growth” fund, intending to invest $25 million to $50 million in promising startups. This fund aims to bolster the European startup ecosystem.
• Alexis Ohanian’s New Fund: Seven Seven Six, the venture firm founded by Alexis Ohanian, has raised $150 million. The firm is actively involved in funding innovative companies, including Nuggs.

Unicorn IPOs

Several high-profile companies have recently completed their initial public offerings.

Marqeta, Monday.com, Zeta Global, and 1stDibs have all gone public, providing insights into the current IPO market and the overall valuation of startups.

An analysis of these debuts offers valuable perspectives on the evolving dynamics of the IPO landscape and its implications for the broader startup community.

The Future of Fintech: Emerging Supercompanies Merge Software and Financial Services

The ability to complete transactions from any location has spurred the growth of a novel, combined category of software businesses. These companies integrate financial services directly into their offerings, rapidly attracting both customers and significant investor interest.

This analysis, leveraging data from a recent Battery Ventures report focusing on “the convergence of software and financial services,” explores the challenges in accurately valuing these entities. It also presents a structured approach to comprehending their business models and the factors driving investor enthusiasm.

Understanding the Valuation Complexities

Determining the worth of these hybrid companies presents unique difficulties. Traditional financial metrics often fall short when applied to businesses that blend software scalability with the regulatory demands and capital intensity of financial services.

The core challenge lies in disentangling the value contributed by the software component versus the financial services aspect. Software businesses typically command higher multiples due to their inherent scalability and recurring revenue streams.

However, financial services are subject to different valuation methodologies, often tied to assets under management or net interest margins. Successfully navigating this requires a nuanced perspective.

A Framework for Analysis

To better assess these companies, consider the following key elements:

• Embedded Finance Strategy: How deeply are financial services integrated into the core software offering? Is it a core differentiator or an add-on feature?
• Unit Economics: Analyze the profitability of each transaction or customer, factoring in both software and financial services costs.
• Regulatory Landscape: Understand the compliance requirements and potential risks associated with offering financial services.
• Growth Trajectory: Assess the potential for scaling both the software and financial services components of the business.

Focusing on these areas provides a more comprehensive understanding of the company’s long-term potential.

(Access to exclusive insights and resources is available through Extra Crunch, our membership program designed to empower founders and startup teams. Registration can be completed here.)

Big Tech Inc.

Waymo is furthering its development of self-driving capabilities. Alphabet, through its Waymo division, is collaborating with J.B. Hunt Transport Services to implement and evaluate autonomous trucking within the state of Texas.

The premise is that long-haul freight transport, primarily operating on highways, presents a viable initial application for self-driving technology.

Autonomous Transit and Data

Alongside Waymo’s progress, Scale has recently announced developments related to the data infrastructure supporting autonomous systems.

Stripe Expands Payment Capabilities

Stripe, currently valued at $84.2 billion, is extending its services to include automated sales tax calculation and remittance.

This new functionality will manage sales tax obligations for both domestic and international transactions, potentially offering Stripe a competitive advantage in the payments landscape.

Apple and the Future of Dark Sky

Following Apple’s acquisition of the weather application Dark Sky, speculation arose regarding its eventual discontinuation.

This outcome is common in technology acquisitions where the acquiring company prioritizes the technology and talent over maintaining the original product.

Apple has confirmed that Dark Sky will remain operational until the end of 2022, after which its future is uncertain.

The acquisition was likely driven by the desire to integrate Dark Sky’s technology into Apple’s existing weather services.

TechCrunch Insights: Identifying 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 yesterday, numerous valuable recommendations for growth marketing professionals within the startup ecosystem have been submitted. We anticipate receiving and reviewing further submissions with enthusiasm.

Contribute Your Recommendations

Your input is valuable! Please complete the survey at this link.

We are planning to publish further analysis concerning growth marketing strategies and best practices.

Recently, we featured "Growth marketing amid the pandemic: An interview with Right Side Up’s Tyler Elliston," offering valuable insights.

Opportunities for Guest Contributions

Our editorial team is committed to ongoing coverage of growth marketing, featuring contributions from both TechCrunch staff and industry experts.

If you possess expertise and are interested in submitting a guest post, detailed guidelines can be found here.

Engage with the Community

Join the conversation regarding Pittsburgh on Twitter Spaces tomorrow, June 11th, at 1:00 PM Pacific Daylight Time or 4:00 PM Eastern Daylight Time.

This discussion will precede our forthcoming TC City Spotlight series event, offering a preview of what's to come.

We encourage participation and look forward to hearing your thoughts and insights.

Event Details

• Platform: Twitter Spaces
• Date: June 11th
• Times: 1:00 PM PDT / 4:00 PM EDT
• Topic: Pittsburgh

The TC City Spotlight series aims to highlight unique aspects of various cities, and Pittsburgh is our next focus.

Don't miss this opportunity to connect with fellow enthusiasts and learn more about the event.