I previously abandoned the effort to identify a common theme linking each article in the weekly Extra Crunch summary; a single, overarching explanation for technology news simply doesn't exist.

The stories that resonated most strongly centered around two significant events of the week – the termination of the $5.3 billion acquisition agreement between Visa and Plaid, and the remarkably successful initial public offerings (IPOs) of Affirm and Poshmark.

It wasn’t unexpected to see Plaid and Visa mutually agree to end their deal following a lawsuit filed by the U.S. Department of Justice to prevent it. However, I was taken aback while editing an interview Alex Wilhelm conducted with Plaid CEO Zach Perret, in which the executive stated that independent growth is, once again, the optimal path for the company.

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In an Extra Crunch analysis, Managing Editor Danny Crichton proposed that the increased scrutiny from federal regulators regarding antitrust enforcement will influence future company valuations. As an illustration, Procter & Gamble and the direct-to-consumer women’s beauty brand Billie also cancelled their proposed merger after the Federal Trade Commission voiced concerns in December.

Considering the FTC’s actions last year to block acquisitions of Billie and Harry’s, Danny reasoned that “U.S. antitrust authorities clearly desire robust competition for consumers in everyday products,” and I believe this principle also applies to Plaid.

December saw the highly successful public market debuts of C3.ai, Doordash, and Airbnb. This week, the used clothing marketplace Poshmark experienced a 140% increase in its share price on its first day of trading, and the consumer-financing company Affirm “set its IPO price above the revised range at $49 per share,” as reported by Alex.

In a piece titled “A theory about the current IPO market”, he outlined eight crucial factors contributing to a strong first-day performance for new listings, including “operating within an environment of very low interest rates” and “maintaining companies as private entities for a longer duration.” These are certainly valuable insights!

Join us next week for further coverage of the public markets in The Exchange, an interview with Bustle CEO Bryan Goldberg discussing his plans for a public offering, an in-depth analysis of the regulatory challenges facing direct-to-consumer brands, and much more.

For those in the U.S., I wish you a pleasant MLK Day holiday weekend, and to everyone, thank you for reading Extra Crunch.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

 

Significant expansion in 2020 demonstrates considerable opportunity within the OKR software market

Following extensive coverage of the active IPO landscape in 2021, Alex Wilhelm turned his attention to an analysis of the software market centered around Objectives and Key Results (OKRs).

The practice of tracking objectives and key results is fundamental to all organizations, and has become increasingly vital as the number of remote knowledge workers has risen since last year.

Reflecting current trends, Gtmhub, a provider of an enterprise orchestration SaaS platform, recently announced a $30 million Series B funding round.

To assess the total addressable market (TAM) for OKR software, Alex contacted a number of companies to request current and past growth data:

• Gtmhub
• Perdoo
• WorkBoard
• Ally.io
• Koan
• WeekDone

“Certain OKR-focused companies did not respond to our inquiry, and some executives preferred to provide their data confidentially, which we respected in order to encourage open communication,” he noted.

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5 consumer hardware VCs discuss their 2021 investment approaches

As part of our recent investor research, Matt Burns spoke with five venture capitalists who regularly invest in consumer electronics companies:

• Hans Tung, managing partner at GGV Capital
• Dayna Grayson, co-founder and general partner at Construct Capital
• Cyril Ebersweiler, general partner at SOSV
• Bilal Zuberi, partner at Lux Capital
• Rob Coneybeer, managing director at Shasta Ventures

Matt observes that while consumer hardware has historically presented challenges for market entry, the COVID-19 pandemic further intensified these difficulties. He points out that the pandemic significantly increased consumer attention towards fitness-focused companies such as Mirror, Peloton, and Tonal.

Additionally: Several VCs identified the entrepreneurs, investors, and businesses that are currently driving innovation within the consumer hardware sector.

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A theory about the current IPO market

For those seeking to understand the unusual dynamics of this year’s public markets, an article published by Alex on Thursday may provide valuable insight.

Having closely monitored the venture capital landscape at a late stage, he has pinpointed eight contributing elements that are driving initial public offerings for companies such as Affirm and Poshmark to exceptionally high valuations.

In brief? “High levels of investor interest combined with a limited number of available shares is resulting in significant price increases.”

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Poshmark’s Initial Public Offering Exceeds Expectations Amidst Investor Enthusiasm for Startups

The resale platform for apparel, Poshmark, experienced a significant increase in its stock value, rising over 140% during its debut on the stock market yesterday.

As Alex highlighted in Thursday’s edition of The Exchange, Poshmark successfully increased its company worth by offering 6.6 million shares at its initial public offering price, generating $277.2 million in capital.

This substantial performance in the stock market is beneficial for Poshmark’s workforce and investors, but it also casts doubt on the assessments of venture capital firms regarding the value of private company equity, according to Alex.

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Will startup valuations shift with increasing antitrust scrutiny?

Recently, Visa decided to discontinue its intended acquisition of Plaid following a lawsuit filed by the U.S. Department of Justice last autumn to prevent the transaction.

Just last week, Procter & Gamble canceled its planned purchase of Billie, a startup focused on beauty products for women – the U.S. Federal Trade Commission also initiated legal action in December to halt that particular deal.

Historically, the U.S. government maintained a relatively hands-off stance regarding the enforcement of antitrust regulations, but that situation is evolving, according to Managing Editor Danny Crichton.

Looking ahead, “antitrust enforcement likely won’t eliminate acquisitions altogether, but it may discourage the companies willing to pay the most from participating in these deals.”

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Dear Sophie: What’s the new minimum salary required for H-1B visa applicants?

Dear Sophie:

I am a graduate student presently authorized to work under the F-1 STEM OPT extension. My employer has communicated their intention to pursue an H-1B visa sponsorship for me in the coming year.

I understand that the traditional random selection process for the H-1B lottery is being superseded by a new method that prioritizes applicants based on compensation levels.

Could you explain the mechanics of this updated procedure?

— Positive in Palo Alto

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Venture capitalists respond to the collapse of the Visa-Plaid agreement

Following the announcement that Visa’s planned $5.3 billion acquisition of the API technology company Plaid was terminated, Alex Wilhelm and Ron Miller gathered insights from a number of investors regarding their perspectives:

• Anshu Sharma, co-founder and Chief Executive Officer, SkyflowAPI
• Amy Cheetham, principal, Costanoa Ventures
• Sheel Mohnot, co-founder, Better Tomorrow Ventures
• Lucas Timberlake, partner, Fintech Ventures
• Nico Berardi, founder and general partner, ANIMO Ventures
• Allen Miller, Venture Capital investor, Oak HC/FT
• Sri Muppidi, Venture Capital investor, Sierra Ventures
• Christian Lassonde, Venture Capital investor, Impression Ventures

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Plaid’s Chief Executive Highlights Renewed Focus Following Terminated Visa Deal

Alex Wilhelm recently spoke with Plaid CEO Zach Perret following the collapse of the proposed acquisition by Visa, seeking insights into his current perspective and the company’s immediate objectives.

Perret acknowledged the preceding years have been marked by significant volatility, and stated that pursuing the Visa agreement appeared advantageous at the time; however, he now believes that operating as an independent entity represents the most promising path for Plaid’s future success.

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2021: A SPAC odyssey

The latest installment of The Exchange featured Alex Wilhelm’s in-depth examination of special purpose acquisition company (SPAC) deals involving digital asset marketplace Bakkt and the personal finance service SoFi.

His analysis of the investor materials for these two deals centered around addressing two key inquiries:

1. Do SPACs represent a viable route to becoming publicly traded for companies demonstrating potential but currently without clear, immediate growth prospects?
2. Considering the substantial number of unicorn companies and the inherent limitations on the volume of traditional initial public offerings (IPOs), could SPACs effectively alleviate the shortage of liquidity?

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12 ‘flexible VCs’ who operate where equity meets revenue share

Startups seeking capital as they grow now have another avenue to explore: investment from “flexible VCs.”

These investors represent a blend of revenue-based financing and conventional venture capital, allowing business owners to “obtain quick access to funding while retaining control over future exits, their company’s development, and ownership possibilities.”

Detailed analysis from fund leaders David Teten and Jamie Finney outlines various investment arrangements, providing founders with a thorough understanding of how flexible VC differs from standard venture capital approaches. They subsequently published a listing of twelve currently active investors who provide funding through these alternative methods.

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These 5 VCs Express Optimism Regarding Cannabis in 2021

Matt Burns notes that for many individuals, cannabis products are considered necessities, but the decision by numerous local authorities to permit cannabis retailers to continue operations throughout the pandemic demonstrated a change in how cannabis is regulated, which subsequently attracted the attention of investors.

Matt queried five venture capitalists regarding their perspectives on the future trajectory of the cannabis sector in 2021 and the guidance they are providing to the companies they have invested in:

• Morgan Paxhia, managing director, Poseidon Investment Management
• Emily Paxhia, managing partner, Poseidon Investment Management
• Anthony Coniglio, CEO, NewLake Capital
• Matt Shalhoub, managing partner, Green Acre Capital
• Jerel Registre, managing director, Curio WMBE Fund